FolioBeyond Rising Rates ETF (RISR) provides pre-designation of the National Association of Insurance Commissioners (NAIC)


Effective 31.05.2022, the RISR has been approved for eligibility in the ETF list identified by the SVO.

NEW YORK, June 22, 2022 (GLOBE NEWSWIRE) – FolioBeyond announces that its lead ETF, the FolioBeyond Rising Rates ETF (RISR), has been pre – designated by the National Association of Insurance Commissioners (NAIC) at 1.B for regulatory filing for insurance companies. This designation allows insurance companies to submit their RISR investments for approval. With this designation, insurance companies can benefit from the regulatory capital review.

“Under NAIC 1.B, both property and accident insurance companies and life insurance companies will be able to use RISR’s high-rated portfolio exposures to increase diversification for general accounts and annuity products,” said Jung Lim, chief executive officer. director of FolioBeyond. “We are excited that this audience has the opportunity to invest in RISR, taking advantage of the current market environment in which RISR is thriving, as well as the risk-based capital review.”

RISR launched in September 2021 and manages a diversified portfolio of securities backed by interest-backed agencies (“MBS IOs”), which provide insurance companies with access to this class of government-backed assets, which offers a liquid alternative to reducing duration and improving income potential. MBS IOs receive only the interest component of the monthly payments from millions of homeowners in the United States. As interest rates rise, homeowners are much less likely to pay off their mortgages in advance. The IO is in a position to receive positive current income for years longer than when interest rates were very low, as they were within the recent monetary policy.

RISR generates a positive return on cash flows from its IO holdings and does not have the negative carryover that comes with buying options, as found in other bond fund strategies.

“This is the first time such a strategy has been offered in an ETF package for the institutional investor,” said George Lukacci, global head of FolioBeyond distribution. “RISR provides a negative duration with current income and is implemented with MBS IOs, which have excellent depth and liquidity in the secondary market.”

To learn more about the FolioBeyond Rising Rates ETF, visit our website.

About FolioBeyond

FolioBeyond is an asset management company that uses advanced algorithms as well as artificial intelligence (“AI”) and machine learning tools designed to build diversified portfolios, manage risk, ensure optimal returns and provide customized solutions for asset management for both fixed income and equity portfolios.

The NAIC Preliminary Designations are the intellectual property of the National Association of Insurance Commissioners (NAIC) and are redistributed here under license. The NAIC pre-designation is an opinion of the NAIC Securities and Exchange Commission (SVO) on the probable credit quality designation that would be assigned by the SVO to an investment if purchased by an insurance company and reported to the SVO. The NAIC ex ante designation is only one of the regulatory factors considered by the SVO as part of its analysis of likely regulatory treatment within the Regulatory Treatment Analysis Service (RTAS). A full discussion of such other regulatory factors is set out in the RTAS letter provided to [the Fund Sponsor]. The pre-NAIC name cannot be used to report the fund to state insurance regulators. However, the acquiring insurance company may obtain a NAIC name for the fund by submitting the collateral and final documents for the fund to the SVO. The indication of likely regulatory treatment indicated by the NAIC’s prior designation is not a recommendation to purchase the fund and is not intended to impart approval or approval to the fund’s sponsor or the NAIC.


Duration: Duration is a measure of the relationship between interest rates and the price of a fixed income security. A positive duration refers to a relationship in which prices decrease as interest rates rise, while a negative duration refers to a relationship in which prices increase as interest rates rise..


The investment involves risk, including possible loss of principal.

The value of interest-bearing securities “MBS IOs” is more variable than other types of mortgage-backed securities. They are very sensitive not only to falling interest rates, but also to the rate of early payments. MBS IOs involve the risk of borrowers failing to meet their mortgage obligations or guarantees underlying mortgage-backed securities, not issuing or otherwise failing, and that during periods of falling interest rates, mortgage-backed securities will be required or prepaid, which may result in the Fund having to reinvest the proceeds in other investments at a lower interest rate.

The Fund’s derivative investments carry risks, including the imperfect correlation between the value of these instruments and the underlying assets or index; the loss of principal, including the potential loss of amounts greater than the original amount invested in the derivative. The value of the Fund’s investments in fixed income securities (excluding MBS IOs) will vary with changes in interest rates. Usually, the increase in interest rates leads to a decline in the value of fixed income securities held indirectly by the Fund.

The fund is non-diversified and may invest more of its assets in securities of one issuer or of a smaller number of issuers than if it were a diversified fund. As a result, the Fund may be more exposed to risks related to and development affecting an individual issuer or a smaller number of issuers, which may increase the instability of the fund and have a greater impact on its performance. The fund is new, without an operational history or experience on which the investor can base his investment decision.

This publication is for informational purposes only and should not be used for other purposes. The information contained herein does not and should not be construed as an offer of consulting services or an offer to sell or an invitation to purchase securities or related financial instruments in any jurisdiction.

Positive carryover is a strategy that involves borrowing money to invest in order to profit from the difference between interest paid and earned.

A negative carryover is a condition in which the cost of holding an investment or a security exceeds the income earned during its holding.

Positive current income is a regular series of cash flows that are routinely derived from investments in the form of dividends, interest and other sources of income.

The investment objectives, risks, fees and costs of the funds must be carefully considered before investing. For a summary and / or prospectus containing this and other important information about the Funds, please call 877-358-0096. Read the prospectus carefully before investing.

The funds are distributed by Foreside Fund Services, LLC.

Copyright © 2022 FolioBeyond, LLC. All rights reserved.

CONTACT: Contacts:  Sales Contact  FolioBeyond Rising Rates ETF (RISR)  George Lucaci, Global Head of Distribution [email protected]  Media Contact  Gregory FCA for FolioBeyond Rising Rates ETF (RISR)  Sam Marinelli, Account Director [email protected]

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