CP High Yield Trend ETF (HYTR)

Overview

The fund is designed for investors looking to diversify their investment portfolio by combining two distinct asset classes: high yield corporate bonds, also known as "junk bonds," and U.S. Treasury bonds with a maturity of 3-7 years. This blend aims to balance the potential high returns of high-risk corporate bonds with the stability and lower risk of U.S. Treasuries. Essential to its strategy, the fund employs a rules-based index approach, ensuring a disciplined investment process. Additionally, a unique feature of this fund is its stop loss mechanism applied to the U.S. 3-7 year Treasury ETFs. This mechanism allows the index to pivot towards U.S. T-bill ETFs, presumably to protect the investment during times of increased volatility or declining Treasury values, contributing to a more stable performance under uncertain market conditions.

Products and Services

• High Yield Corporate Bond ETFs:

  This component of the fund's portfolio focuses on exchange-traded funds that invest in high yield corporate bonds, often referred to as "junk bonds." These are bonds issued by companies that carry a higher risk of default compared to more financially stable companies. The allure of high yield bonds lies in their potential for higher returns, compensating investors for the increased risk they are taking on. By investing in ETFs, the fund gains diversified exposure to a wide array of high yield bonds, which can help mitigate some of the risks inherent in this asset class.

• U.S. 3-7 Year Treasury ETFs:

  Another key component of the fund's strategy involves investment in exchange-traded funds that hold U.S. Treasury bonds with maturities between three and seven years. Treasuries are considered one of the safest investments, backed by the full faith and credit of the U.S. government. This portion of the portfolio provides a stabilizing effect, offering lower but more secure returns. The choice of 3-7 year maturities strikes a balance between short-term Treasuries, which offer minimal returns, and long-term bonds, which are more sensitive to interest rate changes.

• Stop Loss Mechanism on U.S. 3-7 Year Treasury ETFs:

  The fund incorporates a stop loss mechanism specifically for its investments in U.S. 3-7 year Treasury ETFs. This sophisticated strategy is designed to minimize losses during periods of market volatility or when the value of Treasuries is falling. In such scenarios, the mechanism triggers a shift of investment towards U.S. T-bill ETFs, which are short-term securities that offer liquidity and minimal risk. This proactive approach aims to protect the fund's assets and preserve capital for investors.