How This High-Yield Income ETF Picks Bonds

The Gavali High Income Fund, or rather the ETF with ticker GBHI, is an actively managed high-income ETF focused on the upper tier of the high-yield space, primarily double-B and strong single-B rated names. The idea is simple: bond investors are glorified lenders. We are trying to capture attractive income while keeping a disciplined eye on potential downside risks.

You could think of it as taking the very fine research done across our entire platform and just moving up in the capital structure. A number of the names should be familiar to all of our investors and anyone who's familiar with the Gabelli organization as a whole. We build bond portfolios one bond at a time, selecting issuers that we've known across both the equity and credit markets for years.

All the ideas come from our industry experts and our dedicated credit team. As an example, one name that's currently in the portfolio that we're buying today because there's a new issue, but we've had it in the portfolio already, is Herc Rentals. It's a name that we covered from its spin-off years ago.

I think our firm probably has a basis in the stock at, like, $30 a share. It went up to 200-ish. It's retrenched a bit and is now trading at about 130 today. That would be one of the kinds of names that you'd see. So, a name that would be a traditional Gabelli name, but once again, moving up in the capital structure, trying to go and expand and avail ourselves of the very fine work that our analyst team is doing across the platform.