NYLI MacKay Securitized Income ETF (SECR) seeks to provide current income and total return by investing primarily in securitized debt instruments including mortgage-backed securities, asset-backed securities, and collateralized mortgage obligations. This fixed-income ETF focuses on the securitized credit market segment.
How It Works
SECR employs an actively managed approach, with portfolio managers selecting securitized debt securities based on credit analysis, prepayment risk assessment, and yield optimization. The fund invests across various securitized sectors including agency and non-agency mortgage-backed securities, commercial mortgage-backed securities, and consumer asset-backed securities. Portfolio construction emphasizes risk-adjusted income generation while managing duration and credit exposure through ongoing security selection and position sizing.
Key Features
- Actively managed securitized debt focus provides specialized exposure to mortgage and asset-backed securities often overlooked by broad bond ETFs
- 4.68% dividend yield offers attractive income potential from securitized credit instruments with monthly distribution frequency
- Recently launched in May 2024, representing newer approach to accessing securitized debt markets through ETF structure
Risks
- This ETF can lose value if interest rates rise significantly, as securitized debt securities are sensitive to rate changes and could decline 5-15% in rising rate environments
- Credit risk from underlying borrowers could cause losses if mortgage or loan defaults increase, particularly impacting non-agency securities during economic downturns
- Prepayment risk occurs when borrowers refinance early in falling rate environments, forcing reinvestment at lower yields and reducing income potential
Who Should Own This
Best suited for income-focused investors with medium risk tolerance seeking specialized fixed-income exposure as a satellite holding (5-15% of bond allocation). Requires 2-3 year minimum time horizon due to interest rate sensitivity. Appropriate for investors comfortable with active management and seeking yield enhancement beyond traditional government bonds.