If you're considering a core bond holding for your portfolio, the Vanguard Total Bond Market Index Institutional Fund (VBTIX) is a strong contender worth a closer look. Launched in 1995 and managed by Joshua Barrickman since 2013, VBTIX offers broad exposure to the U.S. investment-grade bond market and has grown to more than $43 billion in assets.
Over the past five years, it delivered an annualized return of -0.94%, but has shown moderate volatility, with a five-year standard deviation of 6.26%—notably lower than the category average of 12%, making it a relatively stable option. With an ultra-low expense ratio of just 0.04% and no sales load, the fund is significantly cheaper than most of its peers, though it does require a high $5 million minimum investment.
VBTIX's beta of 1 suggests it tracks the bond market closely, while its slightly negative alpha (-0.04) reflects challenges in beating the benchmark on a risk-adjusted basis.
Finsum: For large institutions or high-net-worth investors seeking cost-efficient, diversified bond exposure with low volatility, VBTIX could be a foundational piece of a fixed-income strategy.
In today’s unpredictable economic landscape, retirees face mounting challenges in preserving their wealth as traditional strategies like the 60/40 portfolio falter under inflation and synchronized market downturns. The financial turmoil of recent years has exposed the shortcomings of conventional diversification, especially during crises like 2022 when both stocks and bonds fell sharply, undermining retirees’ income and security.
As a result, many advisors now advocate incorporating alternative investments—such as private equity, real estate, and private credit—into retirement portfolios to broaden exposure and potentially enhance returns. Alternatives offer benefits like access to private markets, higher return potential through illiquidity premiums, and diversification through non-correlated strategies.
Additionally, alternative strategies like managed futures and long/short funds can provide “crisis alpha,” cushioning portfolios during volatile markets.
Finsum: While these vehicles carry higher fees, tax complexity, and liquidity constraints, their strategic use can help retirees mitigate risk, sustain income, and better navigate an uncertain financial future.
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.
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.
With U.S. GDP dipping negative in Q1 and tariffs clouding the policy outlook, concerns are mounting over how resilient the American consumer truly is. Rising credit card delinquencies point to financial strain, especially among lower-income, lower-FICO borrowers, while looser post-pandemic underwriting standards and inflation have only added pressure.
In contrast, higher-income consumers—especially homeowners—have largely weathered the storm, thanks in part to low fixed-rate mortgages and tighter lending practices in recent years.
This divergence is pushing savvy investors to focus on more defensive segments like asset-backed residential credit and small business loans with strong underwriting. While these may offer slightly lower yields, they come with greater resilience and the potential for long-term stability amid an increasingly bifurcated market.
Finsum: As credit performance grows more uneven, navigating this environment requires a sharper eye on borrower quality and a flexible, informed investment approach.
The Invesco QQQ Trust and Invesco NASDAQ 100 ETF continue to serve as efficient vehicles for tapping into the performance of leading large-cap growth stocks through their tracking of the Nasdaq-100 Index. While passively managed, these funds remain highly relevant for active investors, especially as many portfolio managers increase exposure to familiar tech giants.
During the first quarter of 2025, a temporary pullback in mega-cap names prompted several high-performing active managers to increase holdings in companies like Alphabet, Amazon, Microsoft, and Nvidia.
These four names, which collectively represent over a quarter of the QQQ and QQQM portfolios, have shown resilience and strong earnings momentum, particularly in areas like cloud computing and artificial intelligence. Microsoft’s Azure business, for instance, exceeded expectations with robust demand for AI services, while Amazon rebounded following earlier weakness tied to trade concerns.
Finsum: As fundamentals remain intact and investor interest stays elevated, these ETFs continue to offer a compelling entry point into the most influential names in the growth space.
Value investing pays off long term, but only a few funds consistently get it right—seven top performers just made the cut. Standouts like ClearBridge Dividend Strategy (LCBEX) and Dodge & Cox Stock (DODGX) delivered strong one-, three-, and five-year returns, outpacing peers with disciplined, research-driven approaches.
Fidelity Equity-Income (FEKFX) and Fidelity High Dividend ETF (FDVV) combine yield with quality, offering income without overloading on risk.
Oakmark Select (OANLX) and Natixis Oakmark (NOANX) take concentrated bets on undervalued giants, while WisdomTree U.S. LargeCap Dividend (DLN) adds a smart dividend tilt with broad exposure. On average, large-value funds gained 8.58% over the past year, but these funds beat that benchmark while sticking to sound fundamentals.
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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.
Amid a turbulent market and new U.S. tariff regime, actively managed ETFs like the T. Rowe Price Small-Mid Cap ETF (TMSL) are gaining appeal for their flexibility, research depth, and outperformance potential. TMSL, which has outperformed the Russell 2500 Index by 170 basis points year-to-date, exemplifies how active strategies can navigate uncertainty and respond to evolving risks and opportunities.
The new 10% blanket U.S. tariffs—unseen since 1946—have contributed to earnings downgrades and increased economic unpredictability, making adaptability a critical asset. Active managers can curate portfolios based on bottom-up analysis, selecting strong companies while avoiding those likely to underperform.
TMSL’s focus on small- and midcap firms adds sector diversification to tech-heavy portfolios, with leading exposures in industrials, financials, and healthcare.
Finsum: Its key to consider how fees play a role in active funds but many deliver well above depending on the economic environment.
After years of prioritizing safety, retirement savers are once again embracing market risk, as sales of variable annuities tied to investment fund performance surged in late 2024. According to Wink’s latest data, traditional variable annuity sales climbed 53% year over year to $18 billion, outpacing every other annuity category tracked.
Interest also rose in registered index-linked annuities, which mirror stock index performance, with sales growing 38% to $35 billion, while fixed indexed annuities grew by 22% to $32 billion. In contrast, demand dropped sharply for multi-year guaranteed annuities — down 45% to $29 billion — as fewer consumers sought fixed returns.
This rebound in market-linked products reflects renewed investor optimism but also hints at insurer caution, with some reallocating capital toward products that require less financial backing.
Finsum: Expiring surrender periods on older annuities may be freeing up funds for reinvestment, fueling the uptick in new variable annuity contracts.
In today’s market, financial advisors can show real value by building actively managed, customized portfolios using low-cost passive ETFs instead of pricier active funds. A core-and-satellite approach — with an S&P 500 ETF at the center and defensive sectors, bonds, and gold ETFs as satellites — has proven particularly effective in 2025, outperforming the broader market.
Strategic rebalancing between the outperforming satellites and a weakening core has been key to managing risk and enhancing returns. Defensive ETFs like XLP, XLU, and XLV, along with bond funds like AGG and SGOV and the gold-focused GLDM, have offered strong, risk-adjusted performance this year.
This flexible framework allows advisors to adjust portfolios to market conditions, client goals, or macroeconomic shifts while keeping costs low and transparency high.
Finsum: Ultimately, it strengthens the advisor’s role as an active, thoughtful manager of client wealth without relying on expensive fund managers.