This All-Term Bond ETF Deserves Consideration Amid Rising Rates

A fund that we’ve discussed in the past that underwent a managerial change back in late 2015 got a nice lift today and is now trading at its highest levels since early November.

MAUI (AdvisorShares Market Adaptive Unconstrained Income ETF, Expense Ratio 1.11% $1.2 million in AUM) operates in the “All-Term” bond duration, and “Global” categories in terms of the individual bond selections that it makes in order to achieve its investment goals which according to fund literature is “to provide long-term total return and income with a secondary emphasis on capital preservation.”

MAUI is managed by Reno, NV based American Wealth Management ,which also oversees another AdvisorShares fund that we have talked about in this space before known as MATH (AdvisorShares Meidell Tactical Advantage ETF, Expense Ratio 1.50%, $14.6 million in AUM, 3-star Morningstar rated presently). Back to MAUI, fund literature also states that “MAUI is a non-traditional bond strategy and is designed to be different from most fixed income funds. It tactically allocates to various global regions, income categories, credit qualities, and durations, and when the environment calls for it, will get defensive and move to ultra-short-term fixed income.”

Like MATH, MAUI is an actively managed ETF and also a “Fund of Funds” ETF, in that it invests in other ETFs. When we look at the top holdings presently for example in MAUI we see the following: 1) JNK (SPDR Bloomberg Barclays High Yield Bond, Expense Ratio 0.40%, 30.09% weighting), 2) TLT (iShares 20+ Year Treasury Bond, Expense Ratio 0.15%, 27.04% weighting), 3) EMB (iShares JPMorgan USD Emerging Markets Bond, Expense Ratio 0.60%, 24.90% weighting), 4) LQD (iShares iBoxx $ Investment Grade Corporate Bond, Expense Ratio 0.15%, 9.98% weighting), and 5) IEF (iShares 7-10 Year Treasury Bond, Expense Ratio 0.15%, 5.08%. There is also a small (<3%) money market/cash position in the fund.

The “All-Term” bond category in the land of ETFs includes behemoths such as AGG (iShares Core U.S. Aggregate Bond, Expense Ratio 0.05%, $41.5 billion in AUM) and BND (Vanguard Total Bond Market, Expense Ratio 0.08%, $31.4 billion in AUM) so there is clearly ample interest among ETF investors and portfolio managers for ETFs in this space, giving MAUI good room to expand its asset base.

The AdvisorShares Market Adaptive Unconstrained Income ETF (NASDAQ:MAUI) closed at $23.76 on Wednesday, up $0.22 (+0.93%). Over the past year, MAUI has gained 6.02%, versus a 12.29% rise in the benchmark S&P 500 index during the same period.

MAUI currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #8 of 14 ETFs in the Non-Traditional Bond ETFs category.


Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.

About the Author: Paul Weisbruch
paul-weisbruchPaul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and ETFTrends.com for instance.

He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.

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