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HYLD ETF - Actively Managed High Yield ETF with Value-Oriented Approach

HYLD is an actively managed high yield ETF that avoids LBO-originated debt, employs risk management, and focuses on generating free cash flow. Managed by Tim Gramatovich CFA and Ron Heller, it offers potential capital appreciation and higher coupon cash flow yield.

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HYLD ETF - Actively Managed High Yield ETF with Value-Oriented Approach

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  1. Peritus HYLD ETF-BUY

  2. HYLD ETF • HYLD is actively managed value oriented high yield ETF-avoids LBO originated debt • Employs risk management strategy • Less focus on credit ratings-either AAA or D • Disciplined investment process-does business provide a service, generate free cash flow, etc. • Managed by Tim Gramatovich CFA and Ron Heller

  3. HYLD attributes • Income-buys on secondary market at discount to par providing potential capital appreciation • Coupon-investing in non-investment grade has higher coupon cash flow yield • Issuers-more focused and concentrated than industry norm • Duration/Maturity Profile-low duration (3.2 years vs. 4.07 index)

  4. FUND BASICS • HYLD • NYSE Arca • Inception Date 11/30/2010 • CUSIP 00768Y503 • Current price $51.25 • AUM $210,072,166.70 • Premium/Discount .02 • Net Expense Ratio 1.35%

  5. YTD ETF price

  6. TOP 10 HOLDINGS as of 3/27/13 • Blackrock Liquidity Temp Fund 3.16% • Accrued Income 2.72% • Rotech Healthcare $100.50, 10.75 2.34% • Dyncorp Int’l $99.75, 10.375 2.28% • Air Canada $109.88 12.00 2.26% • Exide Technologies $86.38 8.625 2.25% • Arch Coal $103 9.875 2.24% • Kinetic Concepts $99.88 12.5 2.22% • Affinion Group $79.25 7.875 2.04% • Energy Solutions $105.25 10.75 2.03%

  7. Fixed Income Trends • Possible Bond Bubble? • Bond Outflow, Equity Inflow? • High Yield Market still 700bp spread • Steady demand for new issuance • Leveraged loan market overheated-no covenants, low coupon, etc.

  8. HYLD vs Ten Year Treasury

  9. SWOT Analysis

  10. Investment Thesis • Current low yield environment demands allocation to high yield debt. Active/value style unlocks value in the $1.4 trillion high yield market. • Buy 200 shares at market price.

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