The Leatherback Long/Short Alternative Yield ETF (LBAY) (the “Fund”) net asset value (NAV) advanced by 5.64 % in November, compared to 5.59% for the S&P 500 Index. LBAY paid our twenty-fourth consecutive monthly distribution, with an increase from $0.065 to $0.075 per share in November to celebrate the second anniversary of the Fund! This is a 2.28% SEC yield versus the S&P 500 Index dividend yield of approximately 1.64%, and the 10-Year US Treasury yield of 3.607%. Year to date as of November 30, 2022, NAV for the Fund has returned 22.68%, compared to a decline of 13.10% for the S&P 500 Index. NAV performance for the Fund to date since inception (November 16, 2020) has produced a 56.70% cumulative total return and a 24.65% annualized total return.
The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. Performance current to the most recent month-end can be obtained by calling (833) 417-0090. The gross expense ratio for the fund is 1.43%.
View LBAY standardized performance here.
The Fund’s NAV is the sum of all its assets less any liabilities, divided by the number of shares outstanding. The market price is the most recent price at which the Fund was traded.
WE ARE CELEBRATING TWO YEARS SINCE LAUNCHING OUR FIRST ETF
Leatherback Asset Management announced on December 5, 2022, that its first ETF, the Leatherback Long/Short Alternative Yield ETF (LBAY), recently marked its second anniversary since launch. LBAY has been a consistent top performer in the long/short ETF category and among active ETFs overall.
LBAY, which launched in November 2020 in partnership with Tidal Financial Group, is managed by Leatherback founder and 20-year veteran of the mutual fund and alternative asset management industry Michael Winter, CFA. LBAY is designed to be an actively managed alternative yield strategy that provides a cost-effective, liquid, and potentially tax efficient means for investors to add a high-quality long/short allocation with targeted monthly distributions to their respective portfolios.
In addition to celebrating the Fund recently passing the two-year mark, Leatherback is pleased to announce that the LBAY distribution was increased from 6.5 cents to 7.5 cents for the month of November, with the next targeted distribution set to take place in December 2022.
Over the life of the Fund, LBAY has delivered a cumulative total return in excess of 56% and has paid 24 consecutive months of distributions to shareholders.
LBAY holds long positions in equity securities and other publicly traded instruments that appear well-positioned to deliver attractive yields to shareholders, while simultaneously seeking to identify idiosyncratic opportunities where a security’s price may be poised to decline and will build short positions as determined by the Fund’s management.
LBAY has outperformed the S&P 500 Index year-to-date, delivering over a 22% cumulative total return as of November 30, 2022, with positive contributions coming from both the long and short sides of the Fund’s portfolio. LBAY returns also rank in the top 2% of the Morningstar Long-Short Equity category for the one-year period out of 195 funds as of November 30, 2022.
“The past two years have been challenging for a host of investment strategies, with broad passive exposures experiencing significant downturns and the bulk of long-only active strategies largely disappointing,” said Mr. Winter. “We’re very pleased and proud of the way we have been able to navigate LBAY through the choppy markets of 2021 and 2022, a volatile period which has offered numerous opportunities for a long/short strategy such as ours. Part of our mission has been to provide less correlation to equity markets by seeking downside protection through short positions in overvalued securities. Now that we’re two years in, with approximately $60 million in assets under management, and a cumulative total return of over 56% since inception, we feel we’re off to a strong start and are looking forward to continuing to tell the LBAY story to advisors and investors of all types.”
FINAL THOUGHTS
We hope our investor partners enjoy our monthly perspectives. We are finding many compelling ideas both long and short and we look forward to continuing our dialogue in the weeks and months ahead.
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Happy Holidays!” – The Leatherback Team
1 The S&P 500 Index includes 500 leading companies and covers approximately 80% of the available market capitalization. The S&P 500 Dividend Yield is the estimated sum of all dividends paid by the index’s stocks in the last 12 months, divided by the index market capitalization as reported by the S&P. The dividend yield does not represent or predict the performance of the Fund. Indexes are unmanaged and it is not possible to invest in an index.
2 The 30-day SEC yield is calculated from the 30 days ending on the last day of the previous month. This figure approximates the yield an investor would receive in a year, assuming that each bond in the portfolio is held until maturity. View the 30 day SEC yield here.
There is no guarantee that a company will pay or continually increase its dividend.
Morningstar Rankings represent a fund's total-return percentile rank relative to all funds that have the same Morningstar Category. The highest percentile rank is 1 and the lowest is 100. It is based on Morningstar total return, which includes both income and capital gains or losses and is not adjusted for sales charges or redemption fees.
Opinions expressed are subject to change at any time, are not guaranteed, and should not be considered investment advice.
Before investing you should carefully consider the Fund's investment objectives, risks, charges and expenses. This and other information is in the prospectus. A prospectus may be obtained by clicking here. Please read the prospectus carefully before you invest.
“Long” and “short” are investment terms used to describe ownership of securities. To buy securities is to “go long.” The opposite of going long is “selling short.” Short selling is an advanced trading strategy that involves selling a borrowed security. Short sellers make a profit if the price of the security goes down and they are able to buy the security at a lower amount than the price at which they sold the security short.
Since the Funds are actively managed they do not seek to replicate the performance of a specified index. The Funds therefore may have higher portfolio turnover and trading costs than index-based funds.
LBAY Risks: Investing involves risk, including the loss of principal. As with all ETFs, Fund shares may be bought and sold in the secondary market at market prices. The market price normally should approximate the Fund’s net asset value per share (NAV), but the market price sometimes may be higher or lower than the NAV. The Fund is new with a limited operating history. There are a limited number of financial institutions authorized to buy and sell shares directly with the Fund; and there may be a limited number of other liquidity providers in the marketplace. There is no assurance that Fund shares will trade at any volume, or at all, on any stock exchange. Low trading activity may result in shares trading at a material discount to NAV.
The Fund uses short sales and derivatives (options), both of which may involve substantial risk. The loss on a short sale is in principle unlimited since there is no upward limit on the price of a shorted asset. The potential loss from a derivative may be greater than the amount invested due to counter-party default; illiquidity; or other factors. The Fund may hold illiquid assets which may cause a loss if the Fund is unable to sell an asset at a beneficial time or price.
Through its investments in REITs, the Fund is subject to the risks of investing in the real estate market, including decreases in property revenues, increases in interest rates, increases in property taxes and operating expenses, legal and regulatory changes, a lack of credit or capital, defaults by borrowers or tenants, environmental problems and natural disasters.
The Fund’s exposure to MLPs may subject the Fund to greater volatility than investments in traditional securities. The value of MLPs and MLP based exchange traded funds and notes may be affected by changes in overall market movements, commodity index volatility, changes in interest rates, or sectors affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs, and international economic, political and regulatory developments.
BDCs generally invest in debt securities that are not rated by a credit rating agency and are considered below investment grade quality (“junk bonds”). Little public information generally exists for the type of companies in which a BDC may invest and, therefore, there is a risk that the Fund may not be able to make a fully informed evaluation of the BDC and its portfolio of investments.
The Fund is classified as “non-diversified” and may invest a relatively high percentage of its assets in a limited number of issuers. As a result, the fund may be more susceptible to a single adverse economic or regulatory occurrence affecting one or more of these issuers, experience increased volatility and be highly concentrated in certain issuers.
Foreside Fund Services, LLC, Distributor
Tidal ETF Services, Launch and Structure Partner
Leatherback Asset Management, Foreside Fund Services, and Tidal ETF Services are not affiliated.
Before investing you should carefully consider the Fund's investment objectives, risks, charges and expenses. This and other information is in the prospectus. A prospectus may be obtained by clicking here. Please read the prospectus carefully before you invest.
“Long” and “short” are investment terms used to describe ownership of securities. To buy securities is to “go long.” The opposite of going long is “selling short.” Short selling is an advanced trading strategy that involves selling a borrowed security. Short sellers make a profit if the price of the security goes down and they are able to buy the security at a lower amount than the price at which they sold the security short.
Since the Funds are actively managed they do not seek to replicate the performance of a specified index. The Funds therefore may have higher portfolio turnover and trading costs than index-based funds.
LBAY Risks: Investing involves risk, including the loss of principal. As with all ETFs, Fund shares may be bought and sold in the secondary market at market prices. The market price normally should approximate the Fund’s net asset value per share (NAV), but the market price sometimes may be higher or lower than the NAV. The Fund is new with a limited operating history. There are a limited number of financial institutions authorized to buy and sell shares directly with the Fund; and there may be a limited number of other liquidity providers in the marketplace. There is no assurance that Fund shares will trade at any volume, or at all, on any stock exchange. Low trading activity may result in shares trading at a material discount to NAV.
The Fund uses short sales and derivatives (options), both of which may involve substantial risk. The loss on a short sale is in principle unlimited since there is no upward limit on the price of a shorted asset. The potential loss from a derivative may be greater than the amount invested due to counter-party default; illiquidity; or other factors. The Fund may hold illiquid assets which may cause a loss if the Fund is unable to sell an asset at a beneficial time or price.
Through its investments in real estate investment trusts (REITs), the Fund is subject to the risks of investing in the real estate market, including decreases in property revenues, increases in interest rates, increases in property taxes and operating expenses, legal and regulatory changes, a lack of credit or capital, defaults by borrowers or tenants, environmental problems and natural disasters.
The Fund’s exposure to master limited parterships (MLPs) may subject the Fund to greater volatility than investments in traditional securities. The value of MLPs and MLP based exchange traded funds and notes may be affected by changes in overall market movements, commodity index volatility, changes in interest rates, or sectors affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs, and international economic, political and regulatory developments.
Business Development Companies (BDCs) generally invest in debt securities that are not rated by a credit rating agency and are considered below investment grade quality (“junk bonds”). Little public information generally exists for the type of companies in which a BDC may invest and, therefore, there is a risk that the Fund may not be able to make a fully informed evaluation of the BDC and its portfolio of investments.
The Fund is classified as “non-diversified” and may invest a relatively high percentage of its assets in a limited number of issuers. As a result, the fund may be more susceptible to a single adverse economic or regulatory occurrence affecting one or more of these issuers, experience increased volatility and be highly concentrated in certain issuers.
Foreside Fund Services, LLC, Distributor
Tidal ETF Services, Launch and Structure Partner
