Donoghue Forlines Tactical High Yield ETF
|EXCHANGE:||Cboe BZX Exchange, Inc.|
|INCEPTION DATE:||December 8, 2020|
|NET ASSETS AS OF #date|
|GROSS/NET EXPENSE RATIO||0.95%|
|30-DAY SEC YIELD AS OF 10/31/2021**||1.43%|
|Median 30 Day Bid/Ask Spread|
FUND Data & Pricing
Fund Investment Objective
The Donoghue Forlines Tactical High Yield ETF (the “Fund”) seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FCF Tactical High Yield Index (the “Underlying Index”).
Where does DFHY fit into a portfolio?
The Donoghue Forlines Tactical High Yield ETF is a strategic allocation to investor portfolios. The fund can be used as a sleeve for the fixed income portion of an overall asset allocation portfolio for investors seeking income and or a total return.
Why invest in DFHY?
Income investors are currently challenged with historically low interest rates.
DFHY seeks to participate in the high yield bond market which offers generally high coupon rates to potentially provide a high level of current income. DFHY aims to capture the majority of the upside and more importantly avoid the majority of the downside of the high yield asset class during a full credit market cycle.
The strategy utilizes proprietary defensive “Tactical” indicators to attempt to mitigate downside volatility and preserve capital by shifting primarily towards intermediate term treasury exposure during market declines.
High Yield bonds have typically been less interest rate sensitive than higher quality fixed income asset classes and not as volatile as dividend paying stocks.
DFHY seeks consistent returns for investors seeking income distribution.
We believe that combining High Yield with Tactical Defensive Risk Management is a differentiator in Index and ETF construction.
Quarter End Performance (as of 09/30/2021)
|Quarter||1 Yr||2 Yr||3 Yr||Annualized
(12/08/2020 – 09/30/2021)
|Bloomberg Barclays US Aggregate Bond Index||0.05%||N/A||N/A||N/A||-1.14%|
Expense Ratio: 0.95%. The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will uctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. Performance current to the most recent month-end can be obtained by calling (toll free 800-617-0004). Short term performance, in particular, is not a good indication of a the fund’s future performance, and an investment should not be made based solely on returns.
Top 10 Holdings
Top 10 Holdings (As of )
Donoghue Forlines Tactical High Yield ETF
December 07, 2020 to September 30, 2021
|Days Traded||Calendar Year 2020*||Calendar Year 2021 through 9/30|
|at net asset value||1||1|
*Since Inception 12/7/2020
The following table and line graph are provided to show the frequency at which the closing price of the Fund was at a premium (above) or discount (below) to the Fund’s daily net asset value (“NAV”). The table and line graph represent past performance and cannot be used to predict future results. Shareholders may pay more than NAV when buying Fund shares and receive less than NAV when those shares are sold because shares are bought and sold at current market prices.
|Ex-Date||Record Date||Payable Date||Amount|
John A. Forlines, III • Jeffrey R. Thompson • Richard E. Molari • Nick Lobley
Investment Advisor to the Fund
Donoghue Forlines LLC is a tactical investment firm that has specialized in risk-managed portfolios since 1986. Our tactical strategies are based upon rigorous analysis of decades of historical data. The Donoghue Forlines Funds utilize technical indicators to recognize shifts in market momentum and uses proprietary tactical signals to help mitigate losses in down trending markets and potentially offer strong client-centric riskadjusted returns over a full market cycle.
Investing involves risk. Principal loss is possible.
Holdings are subject to change and should not be considered a recommendation to buy or sell any security.
**The 30-Day SEC Yield is computed under an SEC standardized formula based on net income earned over the past 30 days.
Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information is in the statutory and summary prospectuses, a copy of which may be obtained by visiting the Fund’s website at www.donoghueforlinesetfs.com/etfs/dfnv/ and www.donoghueforlinesetfs.com/etfs/dfhy/. Please read the prospectus carefully before you invest.
Regarding the Donoghue Forlines Tactical High Yield ETF and Donoghue Forlines Risk Managed Innovation ETF: the information in this communication is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This communication is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
Quasar Distributors, LLC
There is no guarantee that DFHY will achieve its investment objective. Investing involves risk, including the possible loss of principal. Because the Fund is an ETF (rather than a mutual fund), shares are bought and sold at market price (not NAV), may trade at a discount or premium to NAV, and are not individually redeemable. Owners of the shares may acquire those shares from the Fund and tender those shares for redemption to the Fund in Creation Unit aggregations only, consisting of 25,000 shares. Brokerage commissions will reduce returns. Investments in the Fund include risks associated with small-and mid-cap securities, which involve limited liquidity and greater volatility than large-cap securities. Because the Fund invests in ETFs, an investor will indirectly bear the principal risks of the underlying funds, including illiquidity, and an investment in the Fund will entail more costs and expenses than a direct investment in the Underlying ETFs. Index-Based Strategy Risk. Passive funds that seek to track an index may hold the component securities of the underlying index regardless of the current or projected performance of a specific security or relevant market as a whole, which could cause the Fund returns to be lower than if the Fund employed an active strategy. The performance of the Fund may diverge from that of its Index. The Fund may participate in futures markets, which are highly volatile, and the use of futures may increase the volatility of the Fund’s NAV. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. Investments by the Fund in high yield securities and unrated securities of similar credit quality are considered to be speculative and are generally subject to a greater risk of loss of principal and interest than investment grade securities. Investment in a fund that utilizes a tactical overlay that seeks to minimize risk may not be appropriate for every investor seeking a particular risk profile. Active and frequent trading of portfolio securities may result in increased transaction costs to the Fund, and may also result in higher taxes if Shares are held in a taxable account.
The FCF Tactical High Yield Index (the “Index”) derives its performance from a rules-based strategy that employs a tactical overlay driven by a technical signal to determine a bullish or defensive posture. The tactical overlay will trigger 80% of the portfolio into a defensive position, should market conditions warrant. When in a defensive position, the Fund will be invested in intermediate-term U.S. Treasury exchange-traded funds (“ETFs”). When bullish, the Fund will direct investments into a selection of High Yield Bond ETFs. It is not possible to invest directly in an index.
Free Cash Flow (FCF) represents the cash that a company is able to generate after accounting for capital expenditures.
Alpha is a measure of performance on a risk-adjusted basis.
Opinions expressed are subject to change, are not guaranteed, and should not be considered investment advice.
Market Price: The current price at which shares are bought and sold. Market returns are based upon last trade price. NAV: The dollar value of a single share, based on the value of the underlying assets of the fund minus its liabilities, divided by the number of shares outstanding. Calculated at the end of each business day.
The Bloomberg Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market.