BondBloxx Files ETF Targeting Preferred Stocks and Hybrid Debt Securities

BondBloxx has filed to launch the BondBloxx Hybrid ETF, an actively managed fund that will invest at least 80% of its assets in hybrid securities combining debt and equity characteristics. Eligible investments include preferred stocks, subordinated debt, capital securities and contingent convertible bonds (CoCos), including Additional Tier 1 (AT1) instruments. The fund will concentrate on financial institutions but may also invest in utilities and industrials. It can hold securities of any credit quality, with no limit on high-yield exposure, and allocate up to 25% to non-U.S. dollar-denominated instruments and securities of non-U.S. issuers. The strategy will combine macroeconomic analysis with issuer-level credit research, assessing interest rates, credit spreads, capital requirements and security structures. The fund will be non-diversified and may use derivatives to manage risk and adjust exposures.