CHAI — Defiance Israel Fixed Income ETF
Data updated: 2024-05-30
CHAI — Defiance Israel Fixed Income ETF. Intermediate Corporate Bond · $2.54M AUM · 0.48% expense ratio. Holdings, fees, performance and SEC filings.
CHAI Fund Overview
CHAI — Defiance Israel Fixed Income ETF is a US ETF managed by ETF Series Solutions, categorised as Intermediate Corporate Bond. ABC INVEST provides holdings, performance, costs, cashflows, risk data, prospectus documents and SEC filings, sourced from SEC filings.
- Type: US ETF
- Manager: ETF Series Solutions
- Category: Intermediate Corporate Bond
- Assets under management: $2.54M
- Ticker: CHAI
- SEC CIK: 0001540305
- SEC series ID: S000080398
- Share class ID: C000242786
CHAI Investment Objective and Strategy
Defiance Israel Fixed Income ETF describes its objective and strategy as follows, from its latest prospectus filed with the SEC by ETF Series Solutions.
Investment objective
The Defiance Israel Fixed Income ETF (the Fund or the Israel Fixed Income ETF) seeks to track the total return performance, before fees and expenses, of the MCM-BlueStar Israel Bonds Index (the Index).
Principal investment strategy
The Fund uses a passive management (or indexing) approach to track the total return performance, before fees and expenses, of the Index. The Index is comprised of global Israeli companies, across all sectors of the economy, irrespective of their listing venue. The Funds Investment Strategy The Fund will generally use a replication strategy to achieve its investment objective, meaning the Fund will generally invest in all of the component securities of the Index in the same approximate proportions as in the Index. However, the Fund may use a representative sampling strategy, meaning it may invest in a sample of the securities in the Index whose risk, return, and other characteristics closely resemble the risk, return, and other characteristics of the Index as a whole, when the Funds sub-adviser believes it is in the best interests of the Fund ( e.g.
, when replicating the Index involves practical difficulties or substantial costs, an Index constituent becomes temporarily illiquid, unavailable, or less liquid, or as a result of legal restrictions or limitations that apply to the Fund but not to the Index). Under normal circumstances, the Fund invests at least 80% of its net assets (plus borrowings for investment purposes) in Israeli Shekel (ILS)- and United States dollar (USD)-denominated debt, specifically bonds, issued by (i) the Israeli government, (ii) Israeli government-related entities or agencies, or (iii) Israeli companies (collectively, the Israel Bonds). The Fund defines Israeli companies as companies that are (a) domiciled in Israel or included in the BlueStar Israel Global Index universe (generally, companies that derive a majority of their revenue from Israel); and (b) incorporated in Israel, the United States, the United Kingdom, or Jersey and Guernsey, Channel Islands.
To the extent the Index concentrates ( i.e. , holds more than 25% of its total assets) in the securities of a particular industry or group of related industries, the Fund will concentrate its investments to approximately the same extent as the Index. The Fund is considered to be non-diversified, which means that it may invest more of its assets in the securities of a single issuer or a smaller number of issuers than if it were a diversified fund. MCM-BlueStar Israel Bonds Index Securities must meet the following eligibility criteria to qualify for inclusion in the Index: ILS-denominated bonds must be listed on the Tel Aviv Stock Exchange at least 18 months to final maturity at the time of issuance at least six months remaining to final maturity (with the next call date used at the maturity date for callable bonds) up to 15 years remaining to maturity for corporate bonds or 30 years for government bonds (with the next call date used at the maturity date for callable bonds) a minimum amount outstanding of at least $100 million for USD-denominated bonds or $250 million for ILS-denominated bonds trade in denominations of up to $10,000 USD (except for USD-denominated bonds of issuers incorporated in the United States) ILS-denominated corporate bonds must be rated as investment grade and USD-denominated corporate bonds must be rated BB- or higher (including junk bonds) according to S&P Global Ratings (S&P).
Securities are selected to the Index, as discussed below, with a minimum of 15 issuers represented in the Index, a maximum of 10 securities issued by the Israeli government or government-related entities, and a maximum of 5 securities issued by any one corporate issuer (based on the parent company). In the Index methodology described below, largest refers to the market value of the security. The 15 largest USD-denominated bonds, with a maximum of one bond per issuer, are selected to the Index. If fewer than 15 issuers have eligible USD-denominated bonds, the next largest ILS-denominated bonds are selected. The next 4 largest bonds (selecting from USD-denominated bonds first) issued by the Israeli government or government-related entities are selected. The next largest bonds (selecting from USD-denominated bonds first) are selected until a total of 35 bonds have been selected to the Index (subject to the issuer limitations set forth above).
The Index uses a modified market cap weighting methodology that caps a securitys weight at 5%, caps the combined aggregate weight of securities issued by the Israeli government and securities issued by Israeli government-related entities at 25%, and caps the aggregate weight of securities issued by any single corporate issuer at 7.5%. All securities selected to the Index are initially weighted based on their market value, subject to the following modifications: Step 1 - If the combined aggregate weight of securities issued by the Israeli government and securities issued by Israeli government-related entities exceeds 25%, or securities issued by any corporate issuer exceeds 7.5%, the weight of those securities will be reduced such that their aggregate weight equals 25% or 7.5%, respectively, with the remaining weight redistributed to all securities from non-capped issuers in proportion to their market value.
This step is repeated until the aggregate weight of all securities from any single corporate issuer is less than or equal to 7.5%. Step 2 - If the weight of any single security exceeds 5%, the weight of that security is reduced to 5% with the remaining weight redistributed to all remaining uncapped securities from uncapped issuers. If the 5% security cap causes the aggregate weight of securities issued by the Israeli government or government-related entities to fall below 25%, or the aggregate weight of securities issued by any single corporate issuer to fall below 7.5%, those issuers will now be considered uncapped. Step 3 - Steps 2 and 3 are repeated until no security has a weight of more than 5%, the aggregate weight of all securities issued by the Israeli government or government-related entities is less than or equal to 25%, and the aggregate weight of securities from any single corporate issuer is less than or equal to 7.5%.
The Index is reviewed and rebalanced monthly. The Index was established in 2023 and is owned and maintained by MarketVector Indexes GmbH (the Index Provider), which owns the BlueStar trademark.
CHAI Holdings
Top 10 holdings of Defiance Israel Fixed Income ETF by percentage of net assets, from the fund's latest SEC N-PORT filing.
| Holding | % of net assets |
|---|---|
| Bank Hapoalim | 4.69% |
| Mizrahi Tefahot Issuing | 4.64% |
| Israel Discount Bank | 4.59% |
| Amdocs Ltd. | 4.42% |
| Teva Pharm Fin Co. LLC | 4.41% |
| Alony Hetz Ppty & Inv | 4.18% |
| Strauss Group Ltd. | 4.18% |
| Shir Shlomo Real Estate | 4.08% |
| B Communications Ltd. | 3.98% |
| Bezeq Israeli Telecom Co. | 3.95% |
CHAI Portfolio Allocation
Asset-class allocation of Defiance Israel Fixed Income ETF by percentage of net assets, from the latest SEC N-PORT filing.
| Asset class | Allocation |
|---|---|
| Fixed Income | 98.5% |
| Cash & Equivalents | 0.3% |
CHAI Costs and Fees
CHAI costs about $48 per $10,000 invested per year in fund expenses.
- Net expense ratio: 0.48%
- Gross expense ratio: 0.48%
- Portfolio turnover: 13%
- Brokerage commissions: 0.00 bps of average net assets (SEC N-CEN)
CHAI Cashflows
Over the 12 months to 2024-03, Defiance Israel Fixed Income ETF had net inflows of $2.51M, from monthly SEC N-PORT filings.
| Month | Net flow |
|---|---|
| 2024-03 | $0 |
| 2024-02 | $0 |
| 2024-01 | $0 |
| 2023-12 | $2.51M |
| 2023-11 | $0 |
| 2023-10 | $0 |
CHAI Debt Constituents
Largest debt holdings of Defiance Israel Fixed Income ETF by percentage of net assets, from the latest SEC N-PORT filing.
| Debt holding | % of net assets |
|---|---|
| Bank Hapoalim | 4.69% |
| Mizrahi Tefahot Issuing | 4.64% |
| Israel Discount Bank | 4.59% |
| Amdocs Ltd. | 4.42% |
| Teva Pharm Fin Co. LLC | 4.41% |
| Alony Hetz Ppty & Inv | 4.18% |
| Strauss Group Ltd. | 4.18% |
| Shir Shlomo Real Estate | 4.08% |
| B Communications Ltd. | 3.98% |
| Bezeq Israeli Telecom Co. | 3.95% |
CHAI Prospectus and SEC Filings
Official Defiance Israel Fixed Income ETF filings on SEC EDGAR — prospectus, portfolio holdings and annual reports.
Related Funds
Other Intermediate Corporate Bond funds tracked on ABC INVEST:
Data Sources
ABC INVEST compiles this page from public filings made to the U.S. Securities and Exchange Commission (SEC) through EDGAR: portfolio holdings and monthly cashflows from Form N-PORT, expenses and returns from fund prospectuses (Form 485BPOS) and the SEC DERA Risk/Return Summary data sets, annual data from Form N-CEN, and shareholder reports from Form N-CSR.