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HBDC
Hilton BDC Corporate Bond ETF
Investment Objective: The Hilton BDC Corporate Bond ETF (the “Fund”) seeks to track the performance, before fees and expenses, of the Solactive Hilton Capital BDC Corporate Bond TR Index (the “Index”).
Principal Investment Strategies
The Fund is an exchange-traded fund (“ETF”) that uses a “passive management” (or indexing) approach to track the performance, before fees and expenses, of the Index.
Under normal circumstances, the Fund will invest at least 80% of its net assets, plus borrowings for investment purposes, in the component securities that make up the Index.
The Fund will concentrate its investments in a particular industry or group of industries (i.e., hold more than 25% of its total assets in the securities of a particular industry or group of related industries), to approximately the same extent as the Index is so concentrated.
Why Business Development Company (BDC) Debt
- Attractive Yield Premium
BDC bonds typically trade at spreads 100-300 basis points* wider than comparable investment-grade corporate securities. This yield pickup reflects the middle-market lending focus of BDCs, allowing investors to potentially harvest enhanced income without venturing into high-yield or unrated credit universes. - Regulatory Leverage Caps and Structural Safeguards
By law, BDCs must maintain a minimum asset-to-debt ratio (150 percent asset coverage) and often voluntarily cap leverage around 1:1 debt-to-equity. These constraints act as built-in risk mitigants, ensuring that bondholders benefit from prudent balance-sheet management and reducing the likelihood of over-leveraging. - Senior Unsecured Priority
Our strategy targets senior unsecured BDC bonds, which sit ahead of equity and most subordinated debt in the capital structure. This position offers a higher claim on assets in the unlikely event of stress, generating a favorable risk-return profile compared with equity or mezzanine exposures. - Liquid Access to Private Credit Markets
Unlike direct private credit funds that impose lock-ups and gated liquidity, publicly traded BDC bonds trade daily on major venues. This delivers the return characteristics of middle-market lending with the transparency, price discovery, and redemption flexibility expected of an ETF structure. - Portfolio Diversification and Low Correlation
Historically, BDC bond returns have shown low correlation to Treasuries and standard corporates, due to unique credit drivers tied to privately negotiated loans. Allocating a modest sleeve to BDC debt can enhance overall portfolio yield and dampen sensitivity to broad credit spreads and rates.
* 1 basis point is equal to one one hundredth of a percent (.0001)
Why Hilton BDC Corporate Bond ETF
First-Mover, Rules-Based Exposure
Our passive index—rebalanced quarterly with credit and liquidity screens—provides one of the first institutional-grade benchmarks dedicated exclusively to BDC debt. It offers a transparent, rules-based pathway for insurers, pension funds, and endowments to access this niche.
Index Information
The Index was designed by Hilton Capital Management, LLC and is owned by Solactive AG who calculates and administers the Index. The index offers targeted exposure to fixed-income securities issued by US registered Business Development Companies (BDCs), aiming to provide investors with access to elevated yields within a regulated, investment-grade framework.
Index MethodologyIndex Methodology
The Index is a rules-based index that seeks to track the total performance of bonds issued by Business Development Companies (“BDC”). BDCs are pooled vehicles which must be organized under the laws of, and have its principal place of business in, the United States, be registered with the Securities and Exchange Commission (“SEC”) and have elected to be regulated as a BDC under the 1940 Act. The principal business of a BDC is to invest in, lend capital to or provide services to privately-held U.S. companies or thinly traded U.S. public companies. BDCs are usually exchange-listed but may be unlisted. The initial composition of the Index, as well as any selections for a rebalance, are determined using the following rules (“Index Requirements”):
A bond’s issuer must be listed in the latest “Business Development Company Report” published yearly by the SEC and available on its website at (www.sec.gov).
- Bond issuers must be classified as “Corporates” (public or private corporations and no direct influence of government or any government entities)
- Only fixed coupon bonds are eligible for the Index. Floating rate notes, convertible, inflation linked bonds, US municipal bonds, ABS/MBS, perpetual bonds and other structured securities are excluded from the Index
- The bond’s issue date must be on or before the Index’s Selection Day, which is five days prior to its scheduled Rebalance Day (the last business day of the quarter)
- A bond must have a minimum amount outstanding issue of $250 million; and on Selection Day, a current price must be available from the Index’s pricing provider, Intercontinental Exchange (“ICE”).
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Fund Details
Fund Statistics
*Median 30 Day Spread is a calculation of Fund's median bid-ask spread, expressed as a percentage rounded to the nearest hundredth, computed by: identifying the Fund's national best bid and national best offer as of the end of each 10 second interval during each trading day of the last 30 calendar days; dividing the difference between each such bid and offer by the midpoint of the national best bid and national best offer; and identifying the median of those values.
Top 10 Holdings
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Top Ten Holdings are subject to change and should not be considered a recommendation to buy or sell any security.
Fund Performance %
| 1 MO | 3 MO | 6 MO | YTD | 1 YR | Since Inception (Cumulative) |
Since Inception (Annualized) |
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| 1 MO | 3 MO | 6 MO | YTD | 1 YR | Since Inception (Cumulative) |
Since Inception (Annualized) |
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* Solactive Hilton Capital BDC Corporate Bond TR Index (Bloomberg ticker: SOLHBDCC)
The performance data quoted represents past performance and is no guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For the most recent month-end performance, please call 1-833-594-4586 or visit the Fund’s website at www.hiltonetfs.com. A 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.
Before investing you should carefully consider the Fund’s investment objective, risk, charges and expenses. This and other information is in the prospectus. A prospectus or summary prospectus may be obtained by visiting www.hiltonetfs.com or calling 1-833-594-4586. Please read the prospectus carefully before you invest.
Investing involves risk. Principal loss is possible.
Credit Risk. Debt securities are subject to the risk of an issuer’s (or other party’s) failure or inability to meet its obligations under the security. Multiple parties may have obligations under a debt security. An issuer or borrower may fail to pay principal and interest when due. A guarantor, insurer or credit support provider may fail to provide the agreed upon protection. A counterparty to a transaction may fail to perform its side of the bargain. An intermediary or agent interposed between the investor and other parties may fail to perform the terms of its service. Also, performance under a debt security may be linked to the obligations of other persons who may fail to meet their obligations. The credit risk associated with a debt security could increase to the extent that the Fund’s ability to benefit fully from its investment in the security depends on the performance by multiple parties of their respective contractual or other obligations. The market value of a debt security is also affected by the market’s perception of the creditworthiness of the issuer.
Fixed Income Securities Risk. The prices of fixed income securities respond to economic developments, particularly interest rate changes, as well as to changes in an issuer’s credit rating or market perceptions about the creditworthiness of an issuer. Generally fixed income securities decrease in value if interest rates rise and increase in value if interest rates fall, and longer-term and lower rated securities are more volatile than shorter- term and higher rated securities.
Interest Rate Risk. Generally fixed income securities decrease in value if interest rates rise and increase in value if interest rates fall, with longer-term securities being more sensitive than shorter-term securities. For example, the price of a security with a one-year duration would be expected to drop by approximately 1% in response to a 1% increase in interest rates. Generally, the longer the maturity and duration of a bond or fixed rate loan, the more sensitive it is to this risk. Falling interest rates also create the potential for a decline in the Fund’s income. These risks are greater during periods of rising inflation. Recent and potential future changes in monetary policy made by central banks and/or their governments are likely to affect the level of interest rates.
Concentration Risk. The Fund’s investments will be concentrated in an industry or group of industries to the extent the Index is so concentrated. In such event, the value of Shares may rise and fall more than the value of shares that invest in securities of companies in a broader range of industries.
Index Risk. The Index may not reflect all companies meeting the Index’s eligibility criteria if certain characteristics of a company are not known at the time the Index is composed or reconstituted.
Liquidity Risk. Liquidity risk exists when particular investments of the Fund would be difficult to purchase or sell, possibly preventing the Fund from selling such illiquid securities at an advantageous time or price, or possibly requiring the Fund to dispose of other investments at unfavorable times or prices in order to satisfy its obligations.
New Fund Risk. The Fund is a recently organized management investment company with no operating history. As a result, prospective investors do not have a track record or history on which to base their investment decisions.
Non-Diversification Risk. Although the Fund intends to invest in a variety of securities and instruments, the Fund is considered to be non-diversified, which means that it may invest a greater percentage of its assets in the securities of a single issuer or a smaller number of issuers than if it were a diversified fund. As a result, the Fund may be more exposed to the risks associated with and developments affecting an individual issuer or a smaller number of issuers than a fund that invests more widely. This may increase the Fund’s volatility and cause the performance of a relatively smaller number of issuers to have a greater impact on the Fund’s performance.
Passive Investment Risk. The Fund invests in the securities included in, or representative of, its Index regardless of their investment merit. The Fund does not attempt to outperform its Index or take defensive positions in declining markets. As a result, the Fund’s performance may be adversely affected by a general decline in the market segments relating to its Index.
Tracking Error Risk. As with all index funds, the performance of the Fund and its Index may differ from each other for a variety of reasons. For example, the Fund incurs operating expenses and portfolio transaction costs not incurred by the Index. In addition, the Fund may not be fully invested in Index Components at all times or may hold securities not included in the Index.
Underlying Index Risk. Neither the Fund’s investment adviser nor the Index Provider is able to guarantee the continuous availability or timeliness of the production of the Index. The calculation and dissemination of the Index values may be delayed if the information technology or other facilities of the Index Provider, calculation agent, data providers and/or relevant stock exchange malfunction for any reason. A significant delay may cause trading in shares of the Fund to be suspended. Errors in Index data, computation and/or the construction in accordance with its methodology may occur from time to time and may not be identified and corrected by the Index Provider, calculation agent or other applicable party for a period of time or at all, which may have an adverse impact on the Fund and its shareholders.
Distributor: Foreside Fund Services, LLC