Coolabah Capital unveils fixed income ETF
A new ETF from Pinnacle-backed Coolabah Capital Investments has hit the market, which seeks to generate higher income than other traditional fixed income investments.
The Australian credit manager’s Coolabah Global Floating Rate High Yield Complex ETF (YLDX) is available to investors via Cboe.
The product acts as an ETF version of the existing Coolabah Floating Rate High Yield Fund, the firm noted, with a few additional features. Namely, it includes Australian and global assets while paying monthly distributions.
The YLDX product aims to offer investors with higher income than other traditional fixed income investments by investing in a portfolio of investment-grade bonds and hybrid securities, and enhancing the yields through the use of gearing or leverage.
In particular, it invests in investment-grade senior and tier 2 bonds, alongside cash securities, issued in G10 currencies by global banks and insurers. It also has the capacity to invest in government bonds, corporate bonds and hybrid securities.
Coolabah Capital utilises a bottom-up and top-down fundamental analysis of both issuers of the securities, and the credit quality and structural features of the securities themselves to construct a portfolio of global cash and debt investments that offer attractive yields while minimising the risk of capital loss.
The ETF currently provides an annual running yield of 7.6 per cent, compared to major bank hybrids with yields of 7.3 per cent, Coolabah Capital stated.
This brings the credit manager’s broader range of ETFs to four. Its three other ETFs include the Coolabah Short Term Income Fund (Managed Fund) (FRNS), the Coolabah Active Composite Bond Fund (Hedge Fund) (FIXD), and the Betashares Active Australian Hybrids Fund (Managed Fund) (HBRD).
Pinnacle Investment Management, which owns 35 per cent of Coolabah Capital, recently announced its results for the six months to 31 December 2024.
The fund manager reported a 151 per cent rise in net profit after tax (NPAT) from $30.2 million in the prior corresponding period (pcp) to $75.7 million. This was helped by strong performance fees from nine affiliates which contributed $36.4 million to the NPAT, compared to $12.3 million in the pcp.
Funds under management (FUM) at the firm’s 18 affiliates was $155.4 billion, thanks to net inflows of $6.7 billion, “acquired” FUM of $27.9 billion and increases due to market movements, and investment performance of $10.7 billion.
AUTHOR
Jasmine Siljic
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