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Peritus HYLD ETF-BUY

Peritus HYLD ETF-BUY. 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.

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Peritus HYLD ETF-BUY

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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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