On Tuesday, Neuberger Berman continued its launch momentum with the rollout of the Neuberger Berman Flexible Credit Income ETF (NBFC).
NBFC operates with a net expense ratio of 0.40%. The fund aims to provide investors with current income, with long-term capital appreciation remaining a secondary priority.
As the fund name suggests, NBFC invests in a wide variety of credit instruments. This can include derivative instruments, along with investment companies that are providing investment exposure to credit instruments.
Qualified securities within the fund can include investments issued by domestic or foreign issuers. This includes emerging markets and instruments issued by supranational entities. While NBFC places no limit on itself in terms of foreign investment, the fund will generally not invest more than 40% of assets toward foreign securities.
Broad Asset Range
NBFC invests in bond securities all across the credit spectrum, including investment-grade and junk bonds. In typical scenarios, the fund will not invest in distressed securities, such as those in default, but may do so if the strategy calls for it. If an asset within NBFC goes into default or becomes distressed, the fund may continue to hold the security.
The ETF places no limit on itself in terms of asset maturity. While there is no target duration for securities, its portfolio managers expect the fund’s average duration to sit between two to eight years.
NBFC’s prospectus adds that the fund may use frequent and active trading. To hedge risk, the fund will also invest in derivatives, such as futures, forwards, and swaps.
The launch of NBFC comes as Neuberger Berman continues to drive launches of new ETF products. On the day prior, Neuberger Berman began the week with the debut of the Neuberger Berman Short Duration Income ETF (NBSD), an income-seeking bond fund.
See More: Neuberger Berman Unveils New Short-Duration Bond ETF
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