According to NSE block deal data, Motilal Oswal Foundation and Motilal Oswal Healthcare Foundation together sold 18.2 lakh shares of Motilal Oswal Financial Services at Rs 842.5 per share. The larger transaction was executed by Motilal Oswal Foundation, which sold 14.55 lakh shares, translating into a deal value of about Rs 122.58 crore.

Separately, Motilal Oswal Healthcare Foundation sold 3.65 lakh shares, valued at about Rs 30.75 crore.
Together, the two entities sold shares worth around Rs 153.34 crore.The entire stake was acquired by HDFC Life Insurance Company through a corresponding block deal at the same price.

Live Events

The transaction represents a transfer of shares from promoter-linked philanthropic entities to a large domestic institutional investor. There was no immediate indication of any change in the promoter group’s controlling stake in the company.
Motilal Oswal Financial is one of India’s leading diversified financial services firms with operations spanning wealth management, capital markets, asset management, housing finance and investment banking.
The company has benefited from the rapid financialisation of household savings and growing participation of retail investors in equities and mutual funds over the past few years. Strong capital market activity and rising assets under management have also supported growth across its key business segments.
HDFC Life’s purchase reflects continued institutional interest in financial-sector stocks, which remain among the preferred bets for domestic investors amid expectations of sustained growth in India’s savings and investment ecosystem.

Shares of Motilal Oswal Financial Services are likely to remain in focus as investors assess the implications of the transaction and changes in institutional ownership. The stock has been one of the key beneficiaries of the structural shift of household savings towards financial assets, a trend that market participants expect to continue over the long term.

NEW YORK — Netflix Inc. shares rose modestly on Monday, climbing to $82.51 in morning trading as investors continued to reward the streaming leader’s consistent subscriber growth and content strategy amid intensifying competition in the video entertainment sector.

The 0.40% gain added $0.33 per share in early dealings, reflecting steady buying interest in one of the market’s most prominent growth stocks. Trading volume was in line with recent averages as Netflix navigated a broader technology sector that showed mixed performance on the day.

Netflix has delivered strong results throughout 2026, with subscriber additions remaining robust across both domestic and international markets. The company’s focus on a broad content slate, including originals, licensed programming and live events, has helped it maintain leadership in the streaming space even as rivals expand their offerings and crack down on password sharing.

Analysts largely maintain Buy ratings on Netflix, citing its scalable business model, improving profitability and ability to command premium pricing. Average 12-month price targets suggest room for further upside, with some optimistic forecasts highlighting the company’s potential to expand margins through advertising tiers and international growth.

The bullish case for Netflix centers on its global scale and data-driven content strategy. With hundreds of millions of subscribers worldwide, the company benefits from significant economies of scale and a vast library that drives viewer engagement. Recent expansions into live sports, gaming and advertising-supported plans have diversified revenue streams and opened new growth avenues.

Netflix’s profitability has improved markedly in recent quarters, with operating margins expanding as the company focuses on efficiency and disciplined content spending. Free cash flow generation has strengthened, providing flexibility for share repurchases, debt management and continued investment in original programming.

For investors, Netflix remains a core holding in the media and technology space. Its ability to retain and grow subscribers while increasing revenue per user has been a key differentiator. The company’s ad tier has shown encouraging adoption rates, contributing to overall revenue growth without significantly cannibalizing higher-priced plans.

Risks for potential buyers include intensifying competition from established players and new entrants, potential saturation in key markets and the high cost of content production. Regulatory scrutiny around data privacy and content moderation also remains a factor, though Netflix has generally navigated these challenges effectively.

For sellers or those on the sidelines, valuation is a primary consideration. Shares trade at premiums that assume continued strong execution and subscriber growth. Any slowdown in international expansion or margin compression could pressure multiples. Near-term volatility tied to quarterly earnings and content release schedules warrants caution for shorter-term traders.

Investment decisions in 2026 should factor time horizon and risk tolerance. Long-term investors focused on digital entertainment trends may favor accumulation on weakness, viewing Netflix as a high-quality compounder with durable competitive advantages. Growth-oriented portfolios benefit from its exposure to global consumer spending on entertainment and advertising.

Broader market context supports a constructive view for Netflix. Streaming consumption continues to grow as cord-cutting persists and consumers seek convenient, personalized content. Netflix’s first-mover advantage and brand strength provide a significant moat in a fragmented market.

Analyst sentiment remains positive overall, with recent notes highlighting the company’s progress in monetization strategies and international markets. Institutional ownership stays high, reflecting confidence among professional investors. Earnings momentum and subscriber metrics continue to drive positive revisions.

Diversification remains important for any exposure to Netflix. While the company’s quality and growth prospects are compelling, concentration risk in media and technology warrants balancing with other sectors. Pairing it with more defensive holdings or international exposure can help manage volatility.

As the year progresses, key catalysts include quarterly subscriber numbers, content slate performance and updates on advertising tier adoption. Netflix’s ability to balance content investment with profitability will be closely watched.

The company continues investing in technology, including recommendation algorithms and original production capabilities, to enhance user experience and retention. Its focus on global storytelling and localized content has been a key driver of international growth.

For retail investors, Netflix offers an accessible way to participate in the digital entertainment economy. Its consumer-facing service provides everyday relevance, while its business model demonstrates strong network effects and pricing power.

Monday’s trading added to positive momentum but also highlighted the stock’s sensitivity to broader market sentiment. The modest gain fits within normal daily movements for a company of Netflix’s size and influence.

As one of the world’s leading entertainment companies, Netflix plays a central role in shaping how audiences consume content globally. Its products and services reach hundreds of millions of households, influencing cultural conversations and viewing habits worldwide.

Investors evaluating Netflix should conduct thorough due diligence, consider individual risk tolerance and maintain a long-term perspective. The company’s track record of innovation and adaptation through industry shifts supports optimism for continued success in the streaming era.

Overall, Netflix remains a high-quality growth story with significant competitive advantages. While risks around competition and content costs persist, its scale, brand strength and strategic execution make it a compelling consideration for investors seeking exposure to the evolving media landscape.

NEW YORK — Nintendo will hold its first general Nintendo Direct presentation of 2026 on Tuesday, June 9, offering roughly 50 minutes of updates focused on games scheduled for the second half of the year across both the original Nintendo Switch and the newly launched Switch 2 console.

The event, set to begin at 7 a.m. PT (10 a.m. ET / 3 p.m. UK / 4 p.m. Europe), will be followed immediately by a 95-minute Nintendo Treehouse: Live segment featuring gameplay demonstrations and developer insights. The presentation will be streamed live on Nintendo’s official YouTube channel and other platforms, giving fans worldwide an opportunity to watch in real time.

This marks the first broad Nintendo Direct since September of the previous year, following a February Partner Showcase and several game-specific presentations. The timing aligns with Nintendo’s traditional mid-year update cadence, providing a platform to showcase upcoming titles during a critical period for both existing Switch owners and early Switch 2 adopters.

Industry observers expect the presentation to highlight a mix of first-party Nintendo franchises and third-party support for the Switch 2. Rumors have circulated about potential announcements for “Fire Emblem: Fortune’s Weave,” with fans hoping for a release window or gameplay footage. Speculation also persists around a possible remake of the classic “The Legend of Zelda: Ocarina of Time,” though Nintendo has not confirmed any specific titles.

The Switch 2, launched earlier in 2026, has generated significant excitement with its enhanced hardware capabilities while maintaining backward compatibility with the original Switch library. Nintendo’s strategy appears aimed at bridging the two systems during the transition period, ensuring a strong software pipeline that appeals to both audiences.

Nintendo has built a reputation for carefully curated Direct presentations that balance surprise reveals with meaningful updates. Previous events have introduced major titles, release dates and gameplay mechanics that drive pre-order activity and long-term engagement. This June edition is expected to follow that pattern, focusing on software support through the holiday season and into 2027.

For the original Switch, which continues to sell well years after launch, the Direct could provide clarity on remaining first-party support and third-party ports. The hybrid console’s enduring popularity has been a cornerstone of Nintendo’s business model, blending handheld and home console experiences in a way that resonates with families and casual gamers.

The Switch 2, meanwhile, represents Nintendo’s next step in hardware evolution. Early reviews have praised its improved performance, screen quality and Joy-Con enhancements. Strong software support will be essential for the new system to achieve the commercial success of its predecessor, making this Direct a key moment in its lifecycle.

Nintendo’s approach to software reveals has historically created significant buzz. The company often saves major announcements for these events, generating headlines and social media conversation that extend well beyond the live stream. Fans and analysts will be watching closely for any indication of new entries in flagship series such as Mario, Zelda, Pokémon or Splatoon.

The Treehouse: Live segment following the main presentation typically offers deeper dives into announced games, with developers demonstrating gameplay and answering questions. This extended format allows for more detailed insights and has become a valued part of Nintendo’s communication strategy with its community.

Beyond specific game announcements, the Direct may touch on broader ecosystem updates, including online services, Nintendo Switch Online features and potential hardware accessories for the Switch 2. Nintendo has increasingly emphasized the importance of its online infrastructure and subscription services as recurring revenue streams.

The event arrives at a pivotal time for the gaming industry. With competition intensifying from Microsoft, Sony and mobile platforms, Nintendo’s ability to deliver compelling exclusive experiences remains a key differentiator. The company’s focus on fun, accessible gameplay has cultivated a loyal audience that spans generations.

Analysts expect the Direct to influence short-term stock movements for Nintendo and related companies, as software announcements often drive console sales and third-party developer interest. The presentation’s impact could extend into the holiday shopping season, when consumer spending on gaming hardware and software typically peaks.

For fans unable to watch live, Nintendo typically uploads the full presentation to its YouTube channel shortly after it concludes, along with additional footage and press materials. Coverage from gaming media outlets will provide analysis, trailers and release date confirmations in the hours and days following the event.

Nintendo has maintained a disciplined approach to its release schedule, avoiding over-promising while delivering high-quality experiences. This Direct will likely reinforce that strategy, offering a balanced slate of titles designed to appeal to different segments of its audience.

As anticipation builds ahead of Tuesday’s presentation, the gaming community is abuzz with speculation and excitement. Whether revealing long-awaited sequels, surprise remakes or entirely new intellectual properties, Nintendo Direct events have a proven track record of delivering memorable moments that define the year ahead in gaming.

The June 9 Direct represents more than just a software showcase — it is a statement of Nintendo’s vision for the future of its hardware platforms and the experiences it aims to deliver. With both the original Switch and Switch 2 in active phases, the company has a unique opportunity to bridge generations of players while introducing fresh innovations.

Fans and industry watchers alike will tune in to see how Nintendo plans to maintain its position as one of gaming’s most beloved and innovative companies. The presentation is certain to generate extensive discussion and set the tone for Nintendo’s second half of 2026.

NEW YORK — Ciena Corp. (NYSE: CIEN) has established itself as a standout performer in the optical networking sector in 2026, benefiting from explosive demand for high-speed connectivity solutions driven by artificial intelligence infrastructure buildout and cloud expansion.

As of early June 2026, shares trade around $488 after significant gains, reflecting investor enthusiasm for the company’s robust earnings growth and raised guidance. The stock has experienced volatility typical of technology hardware names but has trended higher on the back of consistent beats and positive AI tailwinds.

Ciena reported exceptional fiscal second-quarter 2026 results, with revenue reaching $1.57 billion, up 40% year-over-year. Adjusted earnings per share hit $1.64, nearly quadrupling from the prior year and beating consensus estimates. The company raised its full-year fiscal 2026 revenue outlook to $6.3 billion at the midpoint, signaling strong confidence in sustained demand despite supply constraints.

The company’s core optical networking business remains the foundation, with AI-driven requirements for greater bandwidth and lower latency accelerating adoption. Ciena highlighted a $7.7 billion backlog and noted that its addressable market is expected to double to approximately $50 billion by 2029, driven by cloud and AI networking needs.

Analysts are broadly bullish. Multiple firms raised price targets following the earnings report, with targets ranging from the mid-$400s to as high as $720. Consensus leans toward Moderate Buy, with strong representation of Buy ratings. Recent upgrades cite Ciena’s visibility, execution, and positioning in the AI infrastructure wave.

The bullish case for buying Ciena centers on its leadership in optical networking, a critical enabler for AI data centers. As hyperscalers and enterprises scale AI training and inference capabilities, demand for high-capacity, efficient transport solutions grows rapidly. Ciena’s innovation in coherent optics, routing, and automation positions it to capture significant share in this expanding market.

Beyond AI, Ciena maintains a diversified portfolio serving telecom operators, enterprises and government customers. Its focus on software-defined networking and automation helps operators reduce complexity and costs while improving service agility. The company’s strong backlog and multi-year visibility provide a buffer against short-term cyclical pressures.

Ciena maintains a solid balance sheet and generates strong cash flow, supporting continued investment in R&D and potential strategic initiatives. Management has emphasized disciplined execution and customer-centric innovation as key to long-term success.

Risks for potential buyers include valuation that assumes continued strong growth, potential supply chain constraints, and competition from larger players in the networking space. The stock’s recent run has pushed multiples higher, leaving limited room for disappointment if AI spending moderates or execution slips.

For sellers or those on the sidelines, near-term volatility tied to broader technology sector rotations and macroeconomic factors warrants caution. While fundamentals are strong, elevated expectations mean any softening in guidance or delays in AI-related deployments could pressure the stock.

Investment decisions in 2026 hinge on several factors. Sustained AI infrastructure investment by hyperscalers supports a constructive view. Ciena’s exposure to traditional telecom and enterprise markets provides additional diversification. Strong backlog and raised guidance reinforce confidence in near-term performance.

Broader market context favors technology enablers like Ciena. Rising data center power and connectivity demands create multi-year opportunities, while global digital transformation trends bolster optical networking. However, investors must monitor supply chain dynamics, competition and potential regulatory impacts.

Analyst sentiment has improved with recent earnings strength and upward revisions. Institutional ownership remains healthy, reflecting confidence among sophisticated investors. The company’s ability to deliver on ambitious targets while navigating supply constraints will be key.

For growth-oriented investors comfortable with technology cyclicality, selective buying on weakness may appeal. Conservative portfolios might prefer smaller positions or waiting for clearer confirmation of sustained AI demand. Diversification across the networking and semiconductor ecosystem can help manage company-specific risks.

Ciena’s long history of innovation in optical networking positions it well for evolving industry needs. From traditional transport to advanced AI-optimized solutions, the company continues adapting while maintaining strong customer relationships and market leadership.

As the year progresses, upcoming quarterly results, industry conferences and updates on AI-related wins will serve as important catalysts. Ciena’s execution on raised guidance and ability to scale in a supply-constrained environment will be closely watched.

The company continues investing in next-generation platforms, automation and customer success initiatives. Its focus on sustainability and energy-efficient solutions also aligns with growing customer priorities in data center operations.

For retail investors, Ciena offers an accessible way to participate in the AI infrastructure buildout. Its technology underpins much of the high-speed connectivity that powers modern cloud and AI applications, making it a key enabler of digital transformation.

Monday’s trading reflected continued positive sentiment but also highlighted the stock’s sensitivity to broader market moves. The gain fits within the context of strong recent performance driven by AI tailwinds.

As one of the leaders in optical networking, Ciena plays a vital role in the global connectivity ecosystem. Its solutions enable the massive data flows required for cloud computing, AI training and high-bandwidth applications worldwide.

Investors evaluating Ciena should conduct thorough due diligence, consider individual risk tolerance and maintain a long-term perspective. The company’s track record of innovation and value creation through technological shifts supports optimism for continued success in the AI-driven networking era.

Overall, Ciena remains a compelling growth story with significant competitive advantages. While risks around valuation, supply chains and competition persist, its technological leadership, strong backlog and exposure to high-growth markets make it an attractive consideration for investors seeking exposure to the critical infrastructure enabling the AI revolution.

This article was written by

Follow

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

This article was written by

Follow

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

From inside a federal prison cell, disgraced crypto mogul Sam Bankman-Fried is making a bid for a White House lifeline.

Speaking exclusively to FOX Business correspondent Susan Li, the convicted FTX founder said he “absolutely” wants a presidential pardon, while declining to say whether his family is currently lobbying the administration on his behalf.

“I assume that you would want a pardon from the White House?” Li asked Bankman-Fried over the phone.

“Absolutely,” he responded. “It would be obviously, you know, ultimately up to the president, not up to me.”

JAMIE DIMON CALLS COINBASE C.E.O. ‘FULL OF S–T,’ VOWS TO FIGHT CRYPTO-FRIENDLY BILL IN CONGRESS

FTX founder Sam Bankman-Fried spoke to FOX Business from prison, saying he’d “absolutely” be interested in a pardon from President Donald Trump. (Getty Images)

“But have, say, your parents or anyone that you’ve been in contact with at all?” Li asked. 

“I can’t speak for them,” Bankman-Fried said.

In March 2024, the former crypto king was sentenced to 25 years in prison after he was found guilty on two counts of wire fraud and five counts of conspiracy following the collapse of his crypto empire FTX in November 2022. The court also found that FTX customers lost $8 billion, FTX’s equity investors lost $1.7 billion, and lenders to the Alameda Research hedge fund Bankman-Fried founded lost $1.3 billion.

Despite his conviction, Bankman-Fried continued to argue that his prosecution was unjust, pointing to the fact that bankruptcy payouts have increased due in part to the recovery in cryptocurrency markets.

“I didn’t steal user funds either,” he told Li. “Customers have been repaid now 170% or so on their deposits. It’s one of the very few cases where the platform was over-collateralized, where customers were more than made whole. And yet there was, you know, not just a criminal investigation, but a prosecution. And, you know, dozens of years of sentence[s].”

“I can only tell you what I think and, you know, ultimately, customers have been repaid again nearly twice what they had on the platform,” Bankman-Fried said, “and it’s a great disservice to them that it has taken three years.”

Bankman-Fried also said he regrets missing out on the artificial intelligence boom and praised Elon Musk’s business acumen.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

When asked about his fear of missing out, Bankman-Fried said: “It’s a concern I have. You know, there’s a lot that I did try and position, you know, obviously as a platform towards the future, but my venture fund as well, and to try and play a role in that. I’d certainly much rather be, you know, able to help that out from the outside than in here where there’s very little I can do.”

“I think SpaceX has extremely large potential,” he said. “There are some parallels here where… frankly, there are very few companies that are well positioned to play a large role in the space industry. It’s one of those very few companies and I foresee it having an extremely large amount of upside, you know, even from where it is today, let alone where it was when we invested. And, you know, very few people have been able to grow companies like Elon has.”

READ MORE FROM FOX BUSINESS

When I think about TCW Flexible Income ETF (FLXR) I think about an income-oriented fund that can concretely stimulate the expected return function of the bond component of a portfolio without excessively raising the risk function.

And it does so with a portfolio that for almost 50% cannot be covered by classic bond ETFs. This makes it interesting, but from a certain point of view, also difficult to interpret.

Intro and Definition

The fund is domiciled in the TCW ETF Trust and is an active multi-sector fixed income ETF classified as Multisector Bond born in 2018 as a mutual fund, then converted into an ETF and listed on the NYSE on June 24, 2024 with today an AUM exceeding $3.2 billion. It moves with a primary objective of obtaining a high level of current income and as a secondary objective, long-term capital appreciation. To calibrate on results, the declared benchmark is the classic Bloomberg U.S. Aggregate Bond Index; this is used as a reference for comparative metrics, but the fund systematically invests outside the index universe.

The expense ratio is not negligible for a bond ETF: it is 0.40%, decisively higher than fully passive aggregate solutions, to which a 0.05% average bid-ask spread is added. To put it in perspective, compared to BND there are overall 37 bps of cost spread; that is not nothing.

Not by chance does it have a 30-Day SEC Yield of 5.63% and a yield-to-worst of 6.75% distributed monthly, with a risk profile that, however, structurally leans toward IG/securitized. Of course, the yield will change relative to various interest rate environments in the future.

The fund qualifies as a Regulated Investment Company (RIC) under U.S. regulations, avoiding taxation at the corporate level on the condition of timely distributing income. For this reason, distributions are taxed as ordinary income or long-term capital gains.

How Is FLXR Built?

It has 1,624 securities as of March 31, 2026 with a turnover of 295%. No single position exceeds 1% of the portfolio, with the exception of some positions in MBS and Treasuries that by structural nature can be more concentrated. The granularity of the portfolio is extreme: with 1,624 lines, the idiosyncratic risk on a single issuer is almost zeroed out. The implication is that drawdowns do not derive from credit events on individual issuers but from systemic spread or rate movements across entire segments.

The table reveals the true architecture of the portfolio: FLXR is fundamentally a securitized + credit fund with almost zero government exposure (0.85% vs. 46.81% of the index). Specifically, the underweight on Government bonds of almost 46% is the most radical structural choice of the fund and explains why its behavior is structurally different from any traditional bond ETF. At the rating level, there is a tilt toward AA and BBB (or lower, especially BB and B).

The result? An Effective Duration of 3.03 years, an Average Maturity of 6.19 years, and a negative convexity of 0.38. At least these are the figures that emerged from my reworking of the shared data.

What Does FLXR Do?

Its shorter duration (3.03 years) results in lower sensitivity to rate movements compared to the benchmark. At the same time, it must be said that the negative convexity (-0.38) is not usual for aggregate bond portfolios, which pairs well with a core portfolio of positive convexity on the traditional aggregate bond segment. So it interfaces well in a diversified portfolio while still operating in the American bond market, but with a clear deliberate preference for those segments that large passive indices ignore. Not by chance, FLXR invests over 48% in hard-to-access segments, such as non-government-guaranteed securitized mortgages (Non-Agency MBS), asset-backed securities like residential rentals and data centers (ABS), securitized commercial real estate (CMBS), high-yield corporate bonds, emerging markets.

The management team works on two simultaneous levels: how much rate risk to take on, which bond sectors offer the best risk-adjusted return at any given moment, and how much to hold of riskier bonds versus safer ones.

At the operational level, it selects individual securities, enters positions gradually.

How? The approach is explicitly opportunistic and counter-cyclical: the team tends to increase exposure to riskier segments precisely when the market is selling them.

Who Is FLXR For?

This process produces a quite respectable monthly dividend in the speculative bond landscape. The current annualized yield (30-day SEC Yield) is 5.63%, with a Yield-to-Worst of 6.75%.

For comparison, pure investment-grade bond funds yield today around 4-4.6%, while pure high-yield funds reach 6.5-7% but with almost double the volatility compared to FLXR. And it is therefore clear that it presents itself as a fund targeting the investor looking for a distributed income stream.

But be careful; it is not a pure defensive instrument. Rather, it’s an instrument that would almost seem to adapt as a bond satellite in a diversified portfolio, with the specific function of generating high and stable monthly income with a deliberately contained sensitivity to interest rates (duration 3 years, almost half of the broad bond market). To take stock of the situation, FLXR seems built for an investor who wants a high and steady monthly income, is willing to accept an underlying complexity that cannot be directly controlled, and has an investment horizon of at least 2-3 years that allows them to navigate any phases of volatility without having to liquidate the position at the worst moments.

Peer Comparison

We are therefore in the macro-category of supplementary funds for a core component, and there are some managers that are standing out quite a bit. Personally, I would include the active managers of the iShares Flexible Income Active ETF (BINC), the JPMorgan Income ETF (JPIE), and the Angel Oak Income ETF (CARY).

BINC is exposed to similar segments, both active multi-sector with exposures to MBS, ABS, CMBS, and HY. Then it must be said that BINC has different weights in sectoral allocations, with less emphasis on the Non-Agency MBS segment. JPIE instead is another active manager that tries to cover, albeit partially and more tilted toward quality ratings, the segment of FLXR. And I would put CARY on the same level. It is curious to note how since launch, FLXR has been able to maintain a competitive total return, albeit with spreads not so marked compared to peers.

For a more specific comparison, it can make sense here to take a look at the ETF grades from Seeking Alpha, which, in my opinion, clearly show the differences between the ETFs. In this sense, FLXR has greater momentum, which clearly plays in favor of the active management and “market timing” we have seen. And working on “discounts” leads to lower returns (distributions), especially in a rising rate environment. Even though the spread between yields is not so marked, FLXR has a TTM yield of 5.83% per SA, while the competitor with the highest yield is CARY with 5.94%. We are talking about a few basis points.

Risks

About 37.96% of the portfolio is sub-investment grade (BB 21.96% + B 13.67% + CCC 2.33%). Credit risk is therefore not marginal: in a recession scenario with widening HY spreads, this component will suffer losses that may not be offset by the stability of Agency MBS. It must be said, though, that the Non-Agency MBS component (19.82%), CMBS (11.42%), and non-traditional ABS include assets with limited secondary liquidity. In systemic stress environments, the liquidity of these instruments dries up quickly. And the full recession test has not yet occurred during the ETF’s life as an ETF. So it is not easy to define a concrete risk dimension, even though for SA the risk grade remains A with an annualized volatility of just 2.25%.

Pros and Cons

There are therefore clearly positive elements that cannot be ignored:

1. Yield at the competitive risk/return meeting point of the bond market: From what the data seems to show, it captures a good portion of HY yield without concentrating all the risk on sub-IG bonds
2. Genuine diversification across 8 bond macro-categories: 1,624 holdings, no position >1% (except some MBS/Treasuries), 8 sectors simultaneously represented
3. Structural access to the “invisible 48%” of the U.S. bond market: The Bloomberg Agg covers 52% of the market; FLXR systematically invests in the other 48% (non-traditional ABS, Non-Agency MBS, CMBS SASB, CLO)
4. Short duration protects in high or rising rate environments, little price oscillation, and monthly distributed and competitive yields.

Naturally, there are also negative elements that we cannot brush past lightly:

1. ETF track record too short to validate the strategy in extreme scenarios
2. To this is added a liquidity risk in illiquid securitized assets, an underestimated tail risk
3. Then it is quite expensive: Expense ratio 0.40% + a portfolio turnover of 295% means implicit transaction costs (bid-ask spread on illiquid bonds, market impact) are not captured in the expense ratio and not quantified in any official material

This article answers three questions about FLXR:

1. How does FLXR select its securities?
2. What impacts FLXR’s performance?
3. Where can FLXR fit in a portfolio?

Editor’s note: This article is intended to provide a general overview of the ETF for educational purposes only and, unlike other articles on Seeking Alpha, does not offer an investment opinion about the ETF.