FolioBeyond Alternative Income and Interest Rate Hedge ETF
Key Statistics
Historical Performance
Total return including reinvested distributions, from adjusted closing prices.
Price History
Price history is being compiled for this fund.
Top Holdings
Top 25 holdings as of Jan 31, 2026 · source: SEC N-PORT. Full holdings & prospectus →
About RISR
TheFund is an actively-managed exchange-traded fund (“ETF”) that seeks to generate attractive current income while providingprotection against rising interest rates (i.e., an interest rate hedge). The Fund invests primarily in interest-only mortgage-backedsecurities (“MBS IOs”) and U.S. Treasury bonds. Under normal circumstances, the Fund will invest at least 80% of itsnet assets (plus any borrowings for investment purposes) in income producing fixed income securities exhibiting alternative incomecharacteristics (“Alternative Fixed-Income Investments”). Forpurposes of this policy, the Fund considers interest-only mortgage-backed securities (“MBS IOs”) to be AlternativeFixed-Income Investments because they are not traditional fixed-income securities (e.g., corporate bonds or municipal bonds) and,unlike traditional fixed income securities, the holders of MBS IOs are not entitled to receive any principal payments. MBS IOsgenerate income by collecting and distributing interest payments from a pool of mortgages to investors (such as the Fund), withoutincluding any of the principal repayments. Mortgage-backedsecurities (“MBS”) are fixed-income instruments that represent an interest in a pool of mortgages. Stripped MBS alsorepresent interest in a pool of mortgages, the cash flow from which has been separated into interest and principal components.MBS IOs represent the interest portion of the MBS. To provide an interest rate hedge, the Fund seeks to achieve a general durationtarget of approximately negative three to negative ten years (the “Duration Target Range”). ● “Duration” is a measure of the relationship between interest rates and price for a fixed income security. Positive duration refers to a relationship whereby prices decline as interest rates rise, while negative duration refers to a relationship whereby prices increase as interest rates rise. MBS IOs typically exhibit negative duration. ● In the Duration Target Range, the market value of the Fund’s holdings is projected to increase as interest rates rise, which provides protection against falling valuations of most fixed income instruments. In general, at the low end of the Duration Target Range (i.e., negative 3 years), a one basis point (0.01%) increase in interest rates would lead to an approximately three basis point increase in the portfolio’s value, while a one basis point decrease in interest rates would cause an approximately three basis point decrease in the portfolio’s value. Similarly, at the high end of the Duration Target Range (i.e., negative 10 years), a one basis point (0.01%) increase in interest rates would lead to an approximately ten basis point increase in the portfolio’s value, while a one basis point decrease in interest rates would cause an approximately ten basis point decrease in the portfolio’s value. MBSIOs may benefit when interest rates are rising as the rate at which borrowers prepay or refinance their mortgages tends to decrease.During a rising interest rate environment, income from MBS IOs may remain steadier when compared to flat or falling interest rateenvironments. Further, in a rising interest rate environment, the market value of MBS IOs may increase due to slower prepaymentsand, as a result, interest cash flows received by MBS IOs on the aggregate mortgage principal balance generally decline more slowly. Conversely,when interest rates are falling, the rate at which borrowers prepay or refinance their mortgages tends to increase. As a result,the income from MBS IOs may decline and the market value of MBS IOs may decrease, which will result in a decline in MBS IO valuations.The Fund’s portfolio is structured such that a potential decline in MBS IO valuations may be partially offset by gains inthe Fund’s U.S. Treasury positions, which have a positive duration, as discussed further below. In this scenario, the Fund’sportfolio will likely be rebalanced to bring the overall duration in line with the Duration Target Range, which will generallyinvolve selling the U.S. Treasury positions and increasing the Fund’s holdings of MBS IOs. The Fund intends to invest solelyin MBS IOs that are issued or guaranteed by the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan MortgageCorporation (Freddie Mac) or the Government National Mortgage Administration (Ginnie Mae). These securities are referred to as“agency MBS.” Ginnie Mae securities and are backed by the full faith and credit of the U.S. government. Fannie Maeand Freddie Mac securities are guaranteed as to payment of principal and interest by Fannie Mae and Freddie Mac, that are in turnbacked by a line of credit with the U.S. Treasury. It should be noted, however, that in the case of MBS IOs, a default by an underlyingborrower, will have the same effect as a voluntary prepayment (i.e., it will reduce the balance of the underlying mortgage pool,thereby reducing the market value of the MBS IO, notwithstanding such guarantee). TheFund’s investment sub-adviser (“FolioBeyond” or the “Sub-Adviser”) will determine the Fund’soverall asset allocation of the portfolio by analyzing the relative value of MBS IOs and constructing a core portfolio of MBSIOs with various coupon payments and other loan attributes. These loan attributes will include geography, loan purpose (purchaseor refinancing), and loan size, among other factors that the Sub-Adviser analyzes as the most favorable to protect against risinginterest rates. FolioBeyond will utilize U.S. Treasury securities, through either direct investment or through investments inETFs, to rebalance the Fund’s portfolio to protect against falling interest rates by providing some offsetting positiveduration to the portfolio, as U.S. Treasury holdings with a positive duration will offset the negative duration of MBS IO holdings.Generally, the MBS IO portion of the Fund’s portfolio is likely to have negative duration exceeding -10 years while thepositive duration of the Fund’s U.S. Treasury holdings will have the effect of bringing the Fund’s overall portfolioduration to be less negative (e.g., a certain percentage of the Fund’s portfolio with -15 year duration MBS IO portfolioholdings can be combined with a percentage of the Fund’s portfolio with +10 year duration Treasury bonds to achieve theTarget Duration of -10 years). The allocation ratio between MBS IOs and U.S. Treasuries will vary depending on relative valuerelationships, including historical yield levels compared to other financial assets, volatility and other risk measures (as determinedby the Sub-Adviser), macro-environment determinants, such as inflation and economic growth, and other factors that FolioBeyondevaluates to be relevant. Toachieve its Duration Target Range, the Fund may also invest, to a lesser extent, in MBS coupon swaps and MBS inverse IOs (“InverseIOs”). The Fund may also purchase options on bonds or swaps to mitigate the risk of downward movement in interest rates.MBS coupon swaps are transactions that involve the sale of one MBS and the simultaneous purchase of another MBS, which may bewith different agencies and have different coupon payments. MBS inverse IOs are also funded through interest only payments, however,an inverse IO is a leveraged position and the payment received is adjusted based on the current level of a floating interest rate.Inverse IOs are created from a structured collateralized mortgage obligation (“CMO”) where the coupon formula is determinedbased on the difference between the underlying CMO tranche coupon and a floating rate (e.g., 1-month LIBOR), subject to a floor.The resulting coupon payment is based on the principal balance of the underlying CMO tranche. An Inverse IO, therefore, will exhibita combination of its coupon rate declining as short-term interest rates rise (and vice versa for falling short-term interest rates)along with sensitivity to prepayments as the present value of interest cash flows will increase as prepayments decline (and viceversa for rising prepayment rates). Since both prepayment and yield curve components increase the risk of Inverse IOs, they willbe utilized infrequently and only when valuations are determined by the Sub-Adviser to be attractive. An option on a bond or swapgives the holder the right to receive, upon exercise of the option, an amount of cash if the closing value of the underlying bondor swap is greater than, in the case of a call, or less than, in the case of a put, the exercise price of the option. TheSub-Adviser performs both top-down and security-specific analysis. The Sub-Adviser makes buy and sell decisions for the Fund basedon a multi-factor optimization model that provides broad asset allocation guidance while specific bond analysis will be performedfor security selection. Rebalancing of the MBS IOs portion of the portfolio will generally be less frequent while the U.S. Treasuryportion will be more actively rebalanced as required, depending on changes in interest rates.
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Data for RISR is aggregated from third-party providers (Tiingo, Nasdaq, Finnhub) and SEC filings, may be delayed at least 20 minutes, and may be incomplete or contain errors. Nothing here is investment advice. Verify with the official prospectus before investing.