Displaying items by tag: fixed income

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.

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.

With recession warnings growing louder, elevated bond yields are offering a compelling entry point for fixed income investors. During times of rising recession risk, bonds often shine as a defensive play—prices typically climb as demand surges and yields fall, making today's higher yields especially attractive to lock in. 

UBS highlights that quality, investment-grade bonds are offering strong yield potential without pushing investors into riskier territory. The Neuberger Berman Flexible Credit Income ETF (NBFC) stands out as one such vehicle, combining active management with multi-sector exposure to generate consistent income with reduced volatility. 

With a 7.10% 30-day SEC yield and over 350 holdings, NBFC delivers both competitive returns and cost efficiency, making it a strong candidate in today's income-hungry environment.

Finsum: Still, for those seeking more income and broader diversification, a mix of bonds and credit assets—like emerging market debt or private credit—can provide a powerful balance.

BlackRock just gave its muni bond lineup a jolt by flipping its High Yield Municipal Fund into a fresh, actively managed ETF: the iShares High Yield Muni Active ETF (HIMU), now trading on the CBOE. This fund isn’t your average sleepy muni play—HIMU is chasing juicy, tax-free income in today’s high-rate world, with a lean 0.42% net expense ratio after a fee trim. 

It's diving deep into the high-yield pool, with at least 65% of its assets in bonds rated BBB or lower—and yes, there’s room for up to 10% in distressed debt if the upside looks good. BlackRock’s betting that active management gives it the edge, letting it pounce on market moves that passive funds might miss. 

HIMU is the latest in BlackRock’s growing arsenal of bond ETFs, aiming to deliver alpha with a punch of flexibility and tax-free appeal.

Finsum: The launch comes as muni bonds are heating up again, with investors and advisors hunting for income and stability in a volatile environment.

In a turbulent macroeconomic environment, fixed income investments are regaining popularity for their ability to provide income, diversification, and potential capital appreciation. 

Experts at American Century Investments argue that active fixed income ETFs, like the American Century Multisector Income ETF (MUSI), offer strategic advantages over passive counterparts. Active managers can navigate beyond index constraints, tapping into overlooked sectors and exiting positions when valuations peak, unlike passive ETFs tied to benchmark requirements.

MUSI, in particular, leverages a data-driven approach to invest across diverse bond sectors—ranging from high-yield corporates to emerging market debt—with the goal of optimizing risk and return. 

Finsum: Expectations of upcoming interest rate cuts further strengthen the case for bonds, as falling rates could enhance bond yields.