SEIX ISSUER
The SEIX High Income ETF is actively managed by Seix Investment Advisors, a division of Virtus Fixed Income Advisers, LLC, the Fund's sub-adviser. This ETF seeks to achieve its investment objective by primarily investing in a combination of first- and second-lien senior floating rate loans provided by banks and other major financial institutions to various companies. These loans are typically senior in the borrowing companies' capital structure and often have floating coupon rates tied to benchmark lending rates like LIBOR or the prime rate. Seix Investment Advisors emphasizes investments in loans rated below investment grade or unrated loans that they believe are of comparable quality. Additionally, the Fund may invest in junior debt securities, debt securities rated below investment grade, or restricted resale securities.
SEIX DIVIDEND
The Seix Dividend ETF (SEIX) employs an active investment strategy with a focus on first- and second-lien senior floating rate loans. These loans, primarily extended by large financial institutions to various companies, hold seniority in the borrower's capital structure. Typically, coupon rates on these loans are floating and linked to benchmark lending rates like LIBOR or the prime rate. The fund emphasizes investments in loans rated below investment grade or comparable unrated loans. While many loans may not have financial maintenance covenants, the portfolio managers closely monitor the financial performance of borrowers to detect early warning signs. The fund may also invest in junior debt securities, high yield bonds, and restricted securities, making it suitable for investors seeking diversified exposure to income-generating assets. Additionally, SEIX may use derivative instruments to manage risk and enhance its investment strategy, while maintaining a portion of its assets in cash for short-term liquidity needs. Investors should be aware that SEIX is non-diversified and may focus its investments on specific sectors from time to time, potentially increasing issuer concentration and sector risk.
SEIX TRACKING
Tracking senior floating rate loans is the primary objective of the Seix Floating Rate High Income ETF. This actively managed ETF seeks to invest at least 80% of its net assets in first- and second-lien senior floating rate loans provided by banks and other financial institutions to various companies. These loans typically have floating coupon rates tied to benchmark lending rates such as LIBOR or the prime rate. Seix Investment Advisors, the fund's sub-adviser, emphasizes loans rated below investment grade or unrated loans that are deemed to be of comparable quality. The ETF may also invest in junior debt securities, high-yield bonds, and restricted resale securities. Additionally, the fund may allocate up to 20% of its assets to senior loans made to non-U.S. borrowers, though it intends to focus on U.S. dollar-denominated loans. The Seix Floating Rate High Income ETF employs various strategies, including the use of derivative instruments, to achieve its investment goals and may borrow funds up to 33 1/3% of its total assets for investment purposes. It is worth noting that this ETF is non-diversified and may engage in active and frequent trading of its portfolio securities.
SEIX CORRELATION
The correlation aspect of the Seix Floating Rate High Income ETF (SEIX) is primarily associated with its investments in senior floating rate loans. These loans are typically issued by banks and large financial institutions to various companies and are senior in the borrowing companies' capital structure. SEIX's correlation is influenced by the floating coupon rates of these loans, which are tied to benchmark lending rates such as LIBOR or the prime rate. As a result, its correlation is less influenced by changes in interest rates compared to fixed-rate bonds. The fund's focus on below-investment-grade or unrated loans can also impact its correlation with credit markets and the broader economic environment.
SEIX SECTOR
The SEIX Sector ETF primarily focuses on investments in the senior floating rate loan sector. These loans are extended by major financial institutions to various companies and occupy senior positions in the borrowers' capital structures. The coupon rates of these loans are typically floating, tied to benchmark lending rates like LIBOR or the prime rate. SEIX Sector ETF may emphasize loans rated below investment grade or unrated loans that are deemed to be of comparable quality by its sub-adviser, Seix Investment Advisors, a division of Virtus Fixed Income Advisers, LLC. Additionally, the fund might invest in junior debt securities, lower lien collateral securities, and debt securities rated below investment grade, often referred to as junk bonds by Moody's and S&P. It may also allocate a portion of its assets to restricted securities and extend up to 20% of its total assets to senior loans made to non-U.S. borrowers, including emerging markets countries. While the fund does not impose specific limits on average-weighted maturity or remaining maturities of individual securities, it may invest in revolvers, requiring adequate high-quality, liquid assets to cover contractual obligations. Furthermore, SEIX Sector ETF may employ derivative instruments to gain exposure to specific asset classes or issuers and engage in active trading as it seeks to meet its investment objectives.
SEIX EXPOSURE
The Seix Senior Loan ETF (SEIX) primarily seeks exposure to the senior floating rate loan market. This actively managed exchange-traded fund (ETF) aims to achieve its investment objective by investing in a combination of first- and second-lien senior floating rate loans, typically issued by banks and other financial institutions to various companies. These loans are senior in the borrowing companies'' capital structure and generally have floating coupon rates tied to benchmark lending rates like LIBOR or the prime rate. To select investments for the SEIX ETF, Seix Investment Advisors focuses on loans rated below investment grade or unrated loans that are believed to be of comparable quality. The ETF may also invest in junior debt securities, debt securities rated below investment grade (commonly referred to as junk bonds), and restricted securities, such as Rule 144A securities. Additionally, the fund may allocate up to 20% of its total assets to senior loans made to non-U.S. borrowers, though these loans are typically denominated in U.S. dollars.
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