Veteran asset-backed securities trader Skyler Weinand launches
MBSF, an actively managed exchange-traded fund that invests in
floating rate Residential Mortgage-Backed Securities
Regan Capital, an investment firm with $1.3 billion in assets
under management, today announced the launch of the Regan Floating
Rate MBS ETF (NYSE: MBSF), an actively managed exchange-traded fund
that invests primarily in floating rate Agency Residential
Mortgage-Backed Securities (RMBS).
Agency RMBS typically offer higher yields than Treasury bonds
without significant additional risk, since Agency RMBS are issued
by government sponsored entities, such as Fannie Mae and Freddie
Mac.
“Agency Residential Mortgage-Backed Securities give investors
the best of both worlds: the potential to earn a higher yield than
a traditional Treasury bond, while also seeking to benefit from the
U.S. government’s ironclad financial backing,” said Skyler Weinand,
chief investment officer and managing member of Regan Capital and
portfolio manager of MBSF.
MBSF seeks to enhance the spread that Agency RMBS yields
typically have over yields on Treasury bonds through the alpha
generated from its portfolio of actively managed Agency RMBS.
MBSF can also act as a cash alternative to money market funds,
due to its high yield and liquidity.
“Agency Residential Mortgage-Backed Securities may be an
attractive alternative for investors who park cash in money market
funds, which won’t yield as much if the Federal Reserve cuts
interest rates,” Weinand added. “Right now, there aren’t many
alternatives to money markets for investors looking for a place to
keep cash.”
MBSF’s portfolio of Agency RMBS comes with floating rates, which
means that the bond’s interest rate moves based on short-term
Treasury rates. As a result, MBSF can perform in a variety of
interest rate environments, and we believe it is interest rate
neutral. If interest rates rise, the fund offers higher yields. If
interest rates decline, mortgage holders may be more likely to
refinance, or prepay their mortgage balances in order to lock-in a
lower interest rate, which can increase the value of MBSF’s
holdings. Interest rates and bond prices move in opposite
directions.
The Agency RMBS in MBSF are purchased on over-the-counter (OTC)
markets, which are typically only available to investors with deep
relationships with primary dealers and brokers.
“We aim to democratize access to Residential Mortgage-Backed
Securities for all investors with the ETF wrapper, which also
provides liquidity and low fees for investors,” Weinand added, who
was previously head of residential and consumer asset-back
securities trading at Cantor Fitzgerald.
MBSF is launching with roughly $25 million from select seed
investors. MBSF charges a 0.49% annual operating expense fee and
does not seek to replicate the performance of any index.
In 2020, Regan Capital launched the Regan Total Return Income
Fund (RCIRX), a mutual fund which invests across the fixed income
market with a focus on mortgage bonds. It was the recipient of the
5-Star Morningstar Rating™, based on risk-adjusted returns for the
three-year and overall periods, out of 286 funds in the
Nontraditional Bond Category as of 12/31/2023.
For more information, please visit:
https://www.regancapital.com/etf-mbsf/
About Regan Capital
Founded in 2011, Regan Capital, LLC is an SEC Registered
Investment Adviser. The firm’s target investor base includes
endowments and foundations, banks and insurance companies,
corporate and public pension plans, family offices, high net worth
individuals and Registered Investment Advisors. The firm is based
in Dallas, Texas.
Regan Capital was founded by Skyler Weinand, who serves as chief
investment officer and managing member. Previously, Weinand was
head of residential and consumer asset-backed (ABS) securities
trading at Cantor Fitzgerald from July 2007 to March 2011 where he
generated in excess of $40mm in revenue per year off of a $15mm
balance sheet. Prior to that, Weinand was responsible for trading a
$2+ billion mortgage-backed securities (MBS) portfolio at Sit
Investment Associates from July 2005 to June 2007. From 2001 to
2005, Weinand was employed with GMAC-RFC, where he was responsible
for portfolio valuation on a $1 billion MBS subordinate book,
structuring CDOs and structuring the first re-performing
securitizations to come to market.
DISCLOSURES:
This information is for use with concurrent or prior delivery of
the Regan Floating Rate MBS ETF prospectus. Investors should
consider the investment objective, risks, and charges and expenses
of the Fund(s) before investing. The prospectus contains this and
other information about the Fund(s) and should be read carefully
before investing. The prospectus may be obtained by calling the
Fund toll-free at (844)-988-6273 or at www.regancapital.com.
The Regan Total Return Income Fund’s investment objectives,
risks, charges, and expenses must be considered carefully before
investing. The prospectus contains this and other important
information about the investment company. Please read it carefully
before investing. A free hard copy of the prospectus can be
requested by calling +1 888-988-6273 or at
www.regancapital.com.
Regan Floating Rate MBS ETF is distributed by Northern Lights
Distributors, LLC member FINRA/SIPC. Regan Capital, LLC is not
affiliated with Northern Lights Distributors, LLC
The Regan Total Return Income Fund is distributed by Quasar
Distributors, LLC, which is not affiliated with Regan Capital, LLC,
Northern Lights Distributors, LLC, or any of their affiliates.
The Regan Floating Rate MBS ETF has a limited history of
operations with an inception date of February 28, 2024.
IMPORTANT RISKS: Exchange Traded Fund investing involves risk.
Principal loss is possible. Investments in asset-backed and
mortgage-backed securities include additional risks that investors
should be aware of, including credit risk, prepayment risk,
possible illiquidity, and default, as well as increased
susceptibility to adverse economic developments. Investments in
debt securities typically decrease when interest rates rise. This
risk is usually greater for longer-term debt securities.
Investments in lower-rated and non-rated securities present a
greater risk of loss of principal and interest than higher-rated
securities do. The Fund is newly formed and has no operating
history. An investment in the Fund is not a deposit of any bank and
is not insured or guaranteed by any government agency. There is no
guarantee that any investment strategy will achieve its objectives,
generate profits, or avoid losses.
The Fund may effect creations and redemptions in cash and
therefore may recognize gains that may not have been recognized if
it were to distribute portfolio securities in-kind. Investments in
shares may be less tax-efficient that an investment in an ETF that
distributes portfolio securities entirely in-kind.
Mutual fund investing involves risk. Principal loss is possible.
Investments in asset-backed and mortgage-backed securities include
additional risks that investors should be aware of, including
credit risk, prepayment risk, possible illiquidity, and default, as
well as increased susceptibility to adverse economic developments.
Investments in debt securities typically decrease when interest
rates rise. This risk is usually greater for longer-term debt
securities. Investments in lower-rated and nonrated securities
present a greater risk of loss of principal and interest than
higher-rated securities do. For more information on these risks and
other risks of the fund, please see the Prospectus.
The Morningstar Rating™ for funds, or "star rating", is
calculated for managed products (including mutual funds, variable
annuity and variable life subaccounts, exchange-traded funds,
closed-end funds, and separate accounts) with at least a three-year
history. Exchange-traded funds and open-ended mutual funds are
considered a single population for comparative purposes. It is
calculated based on a Morningstar Risk-Adjusted Return measure that
accounts for variation in a managed product's monthly excess
performance, placing more emphasis on downward variations and
rewarding consistent performance. The Morningstar Rating does not
include any adjustment for sales loads. The top 10% of products in
each product category receive 5 stars, the next 22.5% receive 4
stars, the next 35% receive 3 stars, the next 22.5% receive 2
stars, and the bottom 10% receive 1 star. The Overall Morningstar
Rating for a managed product is derived from a weighted average of
the performance figures associated with its three-, five-, and
10-year (if applicable) Morningstar Rating metrics. The weights
are: 100% three-year rating for 36-59 months of total returns, 60%
five-year rating/40% three-year rating for 60-119 months of total
returns, and 50% 10-year rating/30% five-year rating/20% three-year
rating for 120 or more months of total returns. While the 10-year
overall star rating formula seems to give the most weight to the
10- year period, the most recent three-year period actually has the
greatest impact because it is included in all three rating
periods.
©2024 Morningstar, Inc. All Rights Reserved. The information
herein: (1) is proprietary to Morningstar and/or its content
providers; (2) may not be copied or distributed; and (3) is not
warranted to be accurate, complete or timely. Neither Morningstar
nor its content providers are responsible for any damages or losses
arising from any use of this information. Past performance is no
guarantee of future results.
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