Strategy Shares - Day Hagan/Ned Davis Research Smart Sector Fixed Income ETF (SSFI)

Overview

The Strategy Shares - Day Hagan/Ned Davis Research Smart Sector Fixed Income ETF (FIXD) is an actively managed ETF that seeks to provide current income while managing risk through tactical sector allocation within the U.S. fixed income market. It uses a quantitative, rules-based approach based on Ned Davis Research's sector rotation strategy.

Reputation and Reliability

Strategy Shares is a smaller ETF issuer known for its actively managed strategy ETFs. While not as large as industry giants, they aim to provide unique investment solutions.

Management Expertise

The management team combines the expertise of Strategy Shares in ETF management with the research and tactical allocation strategies of Day Hagan and Ned Davis Research, firms with established reputations in investment analysis.

Goal

To seek current income while managing risk through tactical sector allocation within the U.S. fixed income market.

Investment Approach and Strategy

Strategy: The ETF does not track a specific index but employs an active strategy based on a quantitative, rules-based approach leveraging Ned Davis Research's sector rotation models to identify attractive sectors within the fixed income market.

Composition The ETF invests primarily in other fixed income ETFs, representing various sectors of the U.S. fixed income market (e.g., corporate bonds, government bonds, mortgage-backed securities, high-yield bonds).

Market Share: FIXD's market share is relatively small compared to larger, passively managed fixed income ETFs.

Total Net Assets (AUM): 27613000

Key Competitors

• AGG
• BND
• IEF
• LQD
• HYG

Competitive Landscape

The fixed income ETF market is highly competitive, dominated by large, passively managed ETFs like AGG and BND. FIXD differentiates itself through its active, tactical sector rotation strategy, aiming to outperform broad market benchmarks. However, it faces the challenge of proving its value add through active management in a cost-conscious market. Its advantage lies in potentially adapting to changing market conditions more effectively than passive ETFs. The disadvantage is higher expense ratio and potential for underperformance relative to passive strategies.

Historical Performance: Historical performance data is crucial to assess the ETF's track record, but past performance is not indicative of future results.

Benchmark Comparison: The ETF's performance should be compared to a relevant fixed income benchmark (e.g., Bloomberg Barclays U.S. Aggregate Bond Index) to assess its effectiveness in generating alpha.

Expense Ratio: 0.69

Average Trading Volume

The average trading volume of FIXD is relatively low, which might impact the ease of buying or selling large quantities of shares.

Bid-Ask Spread

The bid-ask spread for FIXD can be wider than more liquid ETFs, potentially increasing transaction costs.

Market Environment Factors

Economic indicators (interest rates, inflation), credit spreads, and sector-specific developments influence the performance of FIXD. Rising interest rates, for example, can negatively affect bond prices, while changes in credit spreads impact the value of corporate bonds.

Growth Trajectory

FIXD's growth trajectory depends on its ability to attract investors seeking active management in the fixed income space. Changes to strategy and holdings are driven by the Ned Davis Research sector rotation model.

Competitive Edge

FIXD's competitive advantage lies in its active management approach and the utilization of Ned Davis Research's tactical sector rotation strategy, seeking to identify attractive sectors within the fixed income market. This aims to provide the fund with an opportunity to adapt to changing market conditions. The quantitative, rules-based approach also provides transparency and consistency. However, success is dependent on the accuracy and effectiveness of the models, which are not guaranteed to perform well. The fund aims to offer a differentiated investment strategy in a market dominated by passive, index-tracking ETFs.

Volatility

FIXD's volatility is influenced by the volatility of the underlying fixed income sectors it invests in. High-yield bonds, for example, are generally more volatile than government bonds.

Market Risk

Market risk includes interest rate risk (the risk that rising interest rates will decrease bond prices), credit risk (the risk that issuers will default on their debt), and sector-specific risks (risks associated with particular fixed income sectors).

Ideal Investor Profile

The ideal investor for FIXD is someone seeking current income with an emphasis on risk management through tactical sector allocation, willing to accept active management fees, and understanding the potential for both outperformance and underperformance relative to passive benchmarks.

Market Risk

FIXD is suitable for investors who want active management in fixed income and are willing to pay a higher expense ratio for the potential of better returns than a passive investment. It's also beneficial for investors who are looking for income and diversification from an actively managed ETF.

Strategy Shares - Day Hagan/Ned Davis Research Smart Sector Fixed Income ETF (FIXD) is an actively managed ETF aiming for current income through tactical U.S. fixed income sector allocation. It uses a quantitative, rules-based strategy based on Ned Davis Research's sector rotation models. While offering a potentially adaptive approach, it faces competition from larger, passively managed fixed income ETFs. Investors should consider the higher expense ratio, liquidity, and potential for performance variance when compared to broad market benchmarks. The ETF can be best for long-term investors.

Data Sources:

• ETF.com
• Morningstar
• Strategy Shares Website

Disclaimers:

The data and analysis provided are for informational purposes only and do not constitute investment advice. Past performance is not indicative of future results. Consult with a financial advisor before making any investment decisions.