(VABS) Virtus Newfleet ABS/MBS - Ratings and Ratios

The Virtus Newfleet ABS/MBS ETF (NYSE ARCA: VABS) is a fixed-income exchange-traded fund designed to provide exposure to a diversified portfolio of asset-backed securities (ABS) and mortgage-backed securities (MBS). The funds sub-adviser employs a structured approach to achieve its investment objective by primarily targeting investment-grade tranches of ABS and MBS, including both commercial and residential mortgage-backed securities. Under normal market conditions, the fund allocates at least 80% of its net assets (plus borrowings for investment purposes) to these securities and related instruments, such as derivatives, that exhibit similar economic characteristics. This strategy aims to balance yield generation with risk management, focusing on securities backed by collateral such as credit card debt, auto loans, and residential mortgages.

From a technical perspective, VABS has shown stability with a 20-day moving average of 24.37 and a 50-day moving average of 24.24, indicating a slight upward trend. The 200-day moving average of 23.76 suggests longer-term stability, while the average true range (ATR) of 0.08 highlights low volatility. The funds average daily volume of 12,240 shares reflects moderate liquidity. With an AUM of $53.60M, VABS operates as a smaller ETF in its category, which may influence its market impact and trading efficiency.

3-Month Forecast: Based on the provided data, VABS is expected to maintain its stable performance. The funds low ATR of 0.08 suggests that price fluctuations will remain minimal, likely ranging between 24.30 and 24.60. The convergence of the 20-day and 50-day moving averages indicates a neutral to slightly bullish short-term outlook. The funds focus on investment-grade securities and its structured approach to ABS and MBS exposure position it to capitalize on stable yields in the fixed-income market. However, the relatively small AUM and moderate trading volume may limit its ability to capitalize on broader market movements.