Polen Capital Launches ETFs for Floating-Rate Loans and High-Yield Bonds

In the ever-evolving landscape of investment opportunities, Polen Capital has made a bold move by introducing two new actively managed ETFs: the Polen Floating Rate Income ETF (PCFI) and the Polen High Income ETF (PCHI). These ETFs are designed to help investors navigate the challenges of inflationary pressure and market volatility, offering strategies that can compound income and drive long-term value. Let's dive into what these ETFs bring to the table and how they can fit into your investment portfolio.



The Polen Floating Rate Income ETF (PCFI)

The Polen Floating Rate Income ETF (PCFI) is tailored for investors seeking high current income with a secondary focus on long-term capital appreciation. This ETF primarily invests in senior secured floating-rate loans, which offer a hedge against rising interest rates. In an environment where inflation is a significant concern, floating-rate loans adjust their interest payments based on changes in interest rates, providing a buffer against inflationary pressures. With an expense ratio of 0.59%, PCFI is a cost-effective option for investors looking for floating rate exposure.

The Polen High Income ETF (PCHI)

On the other hand, the Polen High Income ETF (PCHI) offers a more liquid approach to Polen's Opportunistic High Yield strategy. This ETF is focused on delivering high income alongside long-term capital growth. By employing a disciplined, risk-aware investment process, PCHI capitalizes on income opportunities in high-yield bonds and leveraged loans. With an expense ratio of 0.63%, PCHI provides investors with the flexibility and accessibility of an ETF structure, allowing them to capitalize on income opportunities in high-yield bonds and leveraged loans while managing risk.

Key Differences and Investment Strategies

The key differences in investment strategies between PCFI and PCHI lie in their primary investment focus and the types of securities they invest in. PCFI focuses on senior secured floating-rate loans, offering a steady income stream while protecting against the risk of rising interest rates. This makes it an attractive option for investors looking to hedge against inflation and market volatility while generating income.

In contrast, PCHI invests in high-yield bonds and leveraged loans, providing a more flexible and accessible way to achieve income and growth objectives. This ETF uses a disciplined, risk-aware investment process to harvest higher-yielding opportunities within these markets, making it suitable for investors seeking higher income and long-term capital growth.

Addressing Economic Challenges

Both PCFI and PCHI address the current economic challenges of inflationary pressure and market volatility by offering actively managed strategies that focus on floating-rate loans and high-yield bonds, respectively. These ETFs provide investors with the potential for higher income and long-term capital appreciation while managing risk through thoughtful investment processes and experienced management.

Comparing to Traditional Fixed-Income Investments

Compared to traditional fixed-income investments, these ETFs offer several advantages. Traditional fixed-income investments, such as bonds, are subject to interest rate risk, where their value can decline as interest rates rise. In contrast, PCFI's focus on floating-rate loans mitigates this risk by adjusting interest payments with changes in interest rates. Additionally, both PCFI and PCHI are actively managed, which allows for more dynamic adjustments to market conditions compared to passively managed fixed-income investments. This active management can help in navigating market volatility and seeking out higher-yielding opportunities, potentially leading to better risk-adjusted returns.

Conclusion

In summary, PCFI and PCHI cater to different segments of the investor market by offering distinct investment strategies. PCFI focuses on senior secured floating-rate loans to provide steady income and protection against rising interest rates, while PCHI offers a more liquid and flexible approach to high-yield investments, catering to investors seeking higher income and long-term capital growth. These ETFs are designed to help investors meet their income, diversification, and growth goals in today's dynamic markets, providing a trusted solution for delivering results in an environment of inflationary pressure and an increasingly unpredictable economy.