Quadratic Deflation ETF · AMEX:BNDD
Quadratic Deflation ETF — Investor Presentation (December 2023)
23 slides from Quadratic Deflation ETF's investor presentation, Dec 31, 2023
Slide 1: The Quadratic Deflation ETF (NYSE ticker: BNDD)
The Quadratic Deflation ETF (NYSE ticker: BNDD) 1
Slide 2: About Quadratic Capital Management and Krane Funds Advisors, LLC
About Quadratic Capital Management and Krane Funds Advisors, LLC Quadratic Capital Management Quadratic Capital Management is an innovative asset management firm founded in 2013 by Nancy Davis. The firm has utilized its significant expertise in fixed income and options markets to construct BNDD. Qua
Slide 3: Select Quadratic Capital Highlights, Milestones, and Awards
Select Quadratic Capital Highlights, Milestones, and Awards September 2019: March 2020: October 2022: Forbes profiles Nancy Davis Nancy Davis named to inaugural Wall Street Journal profiled 6 investors’ Barron’s "100 Most Influential market views and strategies Women in U.S. Finance" list Lloyd Blan
Slide 4: Problem: The Debt Machine is Challenging Investors
Problem: The Debt Machine is Challenging Investors Extreme over-indebtedness has been dramatically worsened by multiple rounds of fiscal stimulus in response to the global pandemic. Deflation may be the most challenging economic environment for investors. • Is the US different from Japan and Europe?
Slide 5: Demographics
Demographics • The US population is aging, and the baby boomers are retiring. • The birthrate in the US has been falling since the early ‘90s. The Census Bureau estimates that this decline will continue. • An economy is strengthened by people having babies, consuming and working. When population gro
Slide 6: Extreme Indebtedness
Extreme Indebtedness • While many believe stimulus spurs growth, it has ballooned the federal debt to well beyond 100% of GDP. • These are debt levels never seen outside of wartime. Source: Office of Management and Budget and Quadratic Calculations as of September 2023. Numbers for 2022 are actual.
Slide 7: Lower for Longer: How different is the US from Europe and Japan?
Lower for Longer: How different is the US from Europe and Japan? • Global long term interest rates have plummeted over the past three decades amid a surge in sovereign debt issuance. • This may have created a perverse incentive for central banks to keep interest rates “lower for longer.” • Is the US
Slide 8: BNDD: Built to Help Investors Navigate the Debt Machine
BNDD: Built to Help Investors Navigate the Debt Machine • The Quadratic Deflation ETF (the “Fund”) seeks to benefit from lower growth, deflation, lower or negative long-term interest rates, and/or a reduction in the spread between shorter and longer term interest rates by investing in U.S. Treasurie
Slide 9: Quadratic Capital – Our Approach to Investing
Quadratic Capital – Our Approach to Investing BNDD is managed by Quadratic Capital, an innovative, woman-owned asset manager with extensive expertise in options trading and portfolio management. QUADRATIC PHILOSOPHY ACCESS PROCESS PORTFOLIO GOALS Quadratic was Quadratic’s ETF The Quadratic ETFs An i
Slide 10: BNDD Portfolio Composition
BNDD Portfolio Composition • The BNDD portfolio is composed primarily of long dated US treasury bonds. • In addition to bonds, the portfolio includes long-only options on the shape of the US interest rate curve. • As interest rates decline, the bonds should appreciate in price. • The options provide
Slide 11: BNDD Provides Access to the Largest Asset Class: Rates
BNDD Provides Access to the Largest Asset Class: Rates • BNDD provides access to the largest asset class: OTC rates. US Market Size ($ Trillions USD): • Most investors limit their exposure to stocks and bonds. Treasuries • The rates market is nearly 5 times larger than the US stock market. Credit 8%
Slide 12: The BNDD Ecosystem
The BNDD Ecosystem Portfolio Manager: Advisor: Quadratic Krane Funds Capital Custodian: BBH BNDD Exchange: NYSE Auditor: Administrator: KPMG SEI 12
Slide 13: BNDD Risk Profile
BNDD Risk Profile Investing involves risk, including possible loss of principal. There can be no assurance that the Fund will achieve its stated objectives, including its objective of eliminating deflation risk. Investors should take note of the following risks before investing in BNDD. A more thoro
Slide 14: Dedicated to Responsible Investing with a Strong Focus on Diversity
Dedicated to Responsible Investing with a Strong Focus on Diversity Quadratic Capital Management LLC is a registered MWBE firm: • Registered Small/Minority Business Enterprise • Majority woman-owned firm The BNDD Fund: • The BNDD Fund represents an “impact” investment in so far as Quadratic is a reg
Slide 15: Portfolio Management and Capital Markets Leadership
Portfolio Management and Capital Markets Leadership Nancy Davis, Chief Investment Officer, Quadratic Capital Management Nancy Davis founded Quadratic Capital in 2013. Nancy is the portfolio manager for the Quadratic Deflation ETF (Ticker: BNDD) and the Quadratic Interest Rate Volatility and Inflatio
Slide 16: Quadratic Capital and Krane Funds Leadership
Quadratic Capital and Krane Funds Leadership Jonathan Krane, Chief Executive Officer, Krane Funds Advisors Jonathan Krane is the founder and Chief Executive Officer of Krane Funds Advisors, the premier platform for developing and delivering differentiated, high- conviction investment strategies to g
Slide 17: Quadratic Capital and Krane Funds Leadership
Quadratic Capital and Krane Funds Leadership Brendan Ahern, Chief Investment Officer, Krane Funds Advisors Brendan Ahern is the Chief Investment Officer at Krane Funds Advisors (KFA). Mr. Ahern joined KFA in 2012 and was an original member of the team that launched its first ETFs. He leads the firm’
Slide 18: Quadratic Capital and Krane Funds Leadership
Quadratic Capital and Krane Funds Leadership Joseph Dube, Head of Marketing, Krane Funds Advisors Joseph joined KraneShares in June 2012 as Head of Marketing. He is in charge of creating and maintaining all client-facing marketing materials including websites, advertisements, pitch books, and fact s
Slide 19: Guide to Trading ETFs
Guide to Trading ETFs ETF liquidity is determined by the asset class, not by the fund size • Exchange-traded funds (ETFs) are a wrapper, and although an investor may hold a large percentage of an ETF, one must look at the percentage owned of the underlying asset class. ETF investors are not impacted
Slide 20: Understanding ETF Liquidity
Understanding ETF Liquidity An ETF is not a stock • If an ETF does not trade a certain number of shares per day, is the fund illiquid? No. It’s a plausible assumption from a single-stock perspective, but with ETFs, there is more to consider. The key is to understand the difference between the primar
Slide 21: Flow Chart of Creation Redemption Process for ETFs
Flow Chart of Creation Redemption Process for ETFs • Small trades in ETFs flow normally are done in the secondary market, where all market participants can trade. It behaves like a stock, and everyone can buy (sell) from the best seller (buyer) • Large and institutional trades – which normally would
Slide 22: The Quadratic Deflation ETF
The Quadratic Deflation ETF Key Fund Information Ticker BNDD Fund Name Quadratic Deflation ETF Primary Exchange NYSE Total Annual Fund Operating Expense 1.04% Total Annual Fund Operating Expenses After Fee Waiver* 0.99% Inception Date 9/21/21 Distribution Frequency Monthly 22
Slide 23: Important Notes
Important Notes Carefully consider the Funds’ investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Funds' full and summary prospectus, which may be obtained by visiting www.kfafunds.com. Read the prospectus carefully before i
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