Hertford launches actively managed bond ETF

 

Hertford Funds has launched a third actively managed bond ETF.

The product, called the Hertford Total Return Bond ETF will be listed on the New York Stock Exchange.

Adam Laird, head of ETF Strategy for Northern Europe at Lxyor, said investors may think of ETFs as passive strategies, but this product should be considered an active investment, with the level of risk that involves.

He said the way to analyse this product is to look at the track record of the fund manager, in the same way one would with any other active investment.

The fund will be managed by Joseph Marvan, senior managing director and fixed income portfolio manager, Campe Goodman, senior managing director and fixed income portfolio manager, and Robert Burn, managing director and fixed income portfolio manager, at Wellington.

Patrick Connolly, head of communications at IFA firm Chase De Vere, said: “An actively managed ETF seems like a contradiction as most people associate ETFs with passive investments.

“They have a benchmark index but managers can make investment decisions to deviate away from it. There have been a number of actively managed ETFs launched although the concept has had little traction.

“This isn’t a product we would recommend. We rarely use ETFs and prefer to get our core fixed interest exposure, in this challenging environment, through strategic bond funds.”

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