ATAC Credit Rotation ETF (JOJO) and other Junk Bond ETFs take a hit as Interest Rates Rise 

The White Law Group is investigating potential securities claims involving ATAC Credit Rotation ETF (JOJO).

Only one high-yield bond exchange-traded fund (ETF) offered a positive return this year through the end of the third quarter, according to Morningstar. The best performing high-yield ETFs tended to be shorter in duration, while some longer duration ETFs were among the worst performers, including ATAC Credit Rotation ETF JOJO. 

ATAC Credit Rotation ETF (JOJO), an international junk bond ETF, was reportedly one of ten worst performing high yield ETF through the third quarter, according to Financial Advisor Mag. JOJO reportedly invests in either high-yield debt or Treasurys, based on an indicator of volatility. Unfortunately, neither asset class has provided much shelter nor returns so far this year. 

The Federal Reserve raised interest rates by 0.5% on May 4, 2022 to 0.75% to 1.00%, and increased it again in September 2022 to 3% to 3.25%. More increases are anticipated in the months ahead.  

Unfortunately for bond fund investors, the longer the maturity of a particular bond or group of bonds, the greater impact changing interest rates will have.  According to Morningstar, ATAC Credit Rotation ETF (JOJO) is currently down –27.81% YTD. 

Recovery of Investment Losses

The White Law Group is investigating potential securities claims involving broker dealers who may have improperly recommended bond funds to investors.  

Before recommending a bond investment, a financial advisor, at minimum, is required to disclose: (1) the bond’s current price, (2) the commissions or markups that must be paid to acquire the bond, (3) an explanation of the call provisions for the bond (if applicable), (4) the current yield, the yield to maturity, and the yield to call the bond, (5) the amount and timing of the bond payments, and, most importantly, (6) the risk of default or devaluation of that particular bond’s value.  

If a financial advisor failed to disclose this potential risk of investing in bonds, and instead represented that investing in bonds is “safe,” then the investor may have a claim for failure to adequately disclose the true risks of investing in bonds at historically low yields.  This risk is magnified if the maturity of the bond is longer.  The longer the maturity of a particular bond or group of bonds, the greater impact changing interest rates will have.  So, if a financial advisor recommends to a client in a historically low yield environment, to over-concentrate their portfolio in long term bonds, the risk of loss is substantially greater than if the broker recommended short term bonds. 

If you have suffered investment losses in ATAC Credit Rotation ETF (JOJO), the securities attorneys at the White Law Group may be able to help you by filing a FINRA Dispute Resolution claim against the brokerage firm that sold you the investment. 

For a free consultation with our securities fraud attorneys please call The White Law Group at 888-637-5510. 

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Seattle, Washington. For more information on The White Law Group, and its representation of investors, please visit https://whitesecuritieslaw.com/.