Arrow Funds, including the exchange traded product line ArrowShares, has launched the Arrow Reserve Capital Management ETF (ARCM) on the Bats Global Markets Exchange.
A diversified, ultra-short term maturity fixed income portfolio that seeks capital preservation with maximum income, ARCM offers an alternative to traditional money market funds and bank deposits.
"The current market environment has heightened the demand for compelling cash management strategies," says Joseph Barrato, CEO and director of investment strategy at Arrow. "ARCM should appeal to financial advisors and institutional investors, including funds of ETFs, who are looking for a choice beyond lower yielding money markets and non-yielding cash positions."
Sub-advised by Halyard Asset Management, ARCM seeks to maximise returns and income potential without substantially increasing portfolio risk. To achieve that end, the fund invests in a variety of fixed income securities that offer acceptable yield and return potential for a given level of credit risk and maturity. ARCM's exposure has an average duration of 18 months, which may vary based on the sub-adviser's interest rate forecast.
"Regulatory changes in the money market space combined with a low interest rate environment have driven many investors to take a closer look at their cash management strategies," says Michael Kastner, principal at Halyard Asset Management. "For the past ten years we have worked closely with family offices and institutional investors to offer a strategy that seeks to provide a competitive yield and return, but with a lower level of volatility compared to the ultra-short term bond universe. We are now pleased to partner with Arrow to make the Reserve Capital Management strategy more widely available in a convenient ETF structure."