The bond market is undergoing a profound transformation as actively managed fixed-income ETFs gain traction among investors looking for more agile solutions. These funds combine strategic bond selection with the flexibility and transparency of the ETF format, offering a powerful tool for navigating an environment defined by volatility and uncertainty. 

Unlike passive strategies tied to static benchmarks, active managers can explore underfollowed sectors of the bond market, aiming for higher yields and stronger risk management. The ETF Rule of 2019 opened the floodgates for innovation, helping fuel a surge in actively managed ETF launches and inflows, particularly in fixed income. 

Investors are drawn to the structure’s real-time trading, lower embedded costs, and resilience in stressed markets—traits that are increasingly valuable in a dynamic rate environment. 

Finsum: Active fixed-income ETFs are becoming a key component of modern portfolio construction, reshaping how investors engage with the bond market.

Private credit has grown so large and intertwined with banks and insurers that it now poses a systemic risk in future financial crises, according to a new Moody’s Analytics study co-authored by economists and regulators. 

The report warns that the opaque nature of private credit and its deepening ties to traditional finance could amplify financial shocks due to increased interconnectedness. Since the 2008 crisis, banks have reduced lending amid tighter regulations, creating room for private credit funds—often lending to riskier, heavily indebted companies—to flourish with less oversight. 

Researchers used business development companies as a proxy for the sector and found their market behavior is now more correlated with broader financial stress than in the past. Although private credit firms argue they are less prone to panics due to their long-term investor base, banks are still deeply exposed through indirect relationships like fund financing and risk transfers. 

Finsum: While private markets tend to be insulated from recessions compared to their public counter parts it’s important to keep this risk in mind when investing

Despite recent political pushback, institutional support for ESG (environmental, social, and governance) investing remains strong, with many large investors continuing to prioritize sustainability. 

This is good news for ESG-focused ETFs like the Invesco ESG Nasdaq 100 ETF (QQMG) and the ESG Nasdaq Next Gen 100 ETF (QQJG), which could see more adoption as political resistance fades. A 2025 BNP Paribas survey found that 87% of institutional investors have not altered their ESG goals, and 84% expect sustainability progress to continue or accelerate through 2030. 

Furthermore, 85% of respondents said they now integrate sustainability criteria into their investment processes. However, challenges persist, including concerns about ESG data reliability, greenwashing, and balancing short-term performance with long-term sustainability. 

Finsum: ETFs that aim to address those concerns by tracking transparent, sustainability-aligned indexes with performance in line with their non-ESG benchmarks.

Small-cap stocks have struggled in early 2025, hurt by trade tensions and economic sensitivity, but a broadening equity market may set the stage for recovery. Despite current volatility, small-caps could benefit from their domestic focus—nearly 80% of Russell 2000 revenues come from within the U.S.—which offers insulation from global trade disruptions. 

Historically, small-caps have outperformed during periods when large-cap dominance fades, and current signs of market broadening echo those conditions. To navigate uncertainty, investors should favor high-quality small-cap stocks with strong fundamentals, as they tend to hold up better in downturns and outperform in recoveries. 

Market timing, however, remains risky, missing just a few key months can erase most gains, making long-term commitment crucial. 

Finsum: Patient investors who focus on quality and use active management may be best positioned to capture small-cap upside as market conditions evolve.

A new Goldman Sachs Asset Management survey shows insurers are increasingly focused on annuities as a retirement income solution amid ongoing market volatility. Sixty-four percent of respondents rank annuities among their top three priorities, with many already offering or considering in-plan annuity options. 

Integration into managed accounts and target-date funds is rising, and automatic plan defaults are viewed as key to driving adoption during retirement decumulation. Registered index-linked and guaranteed variable annuities are gaining popularity, and insurers are diversifying underlying indices, with rising interest in AI strategies and international markets. 

AI is also being widely adopted, with 90% of insurers seeing it as vital for improving investor understanding, education, and operational efficiency. 

Finsum: Registered investment advisers have become the leading growth channel for annuity distribution, surpassing independent firms.