A New Active Fixed Income ETF for a Shifting Market Environment

First Trust has partnered up with TCW Investment Management to launch an actively managed global bond exchange traded fund to help investors gain exposure to undervalued areas of the market.

The recently added First Trust TCW Opportunistic Fixed Income ETF (NasdaqGM: FIXD) comes with a 0.55% net expense ratio.

The active bond ETF will try to maximize long-term total return by investing in fixed-income securities of any credit quality issued by the “U.S. government or its agencies, instrumentalities or U.S. government-sponsored entities; Treasury Inflation Protected Securities (TIPS); agency and non-agency residential mortgage-backed securities (RMBS); agency and non-agency commercial mortgage-backed securities (CMBS); agency and non-agency asset-backed securities (ABS); domestic corporate bonds; fixed income securities issued by foreign corporations and foreign governments, including emerging markets; bank loans, including first lien senior secured floating rate bank loans (Senior Loans); municipal bonds; and other debt securities bearing fixed interest rates of any maturity. The Fund may also invest in collateralized loan obligations (CLOs), floating rate securities, variable rate securities and Rule 144A securities,” according to the prospectus sheet.

The active ETF can also hold up to 35% of assets in speculative-grade debt securities and up to 20% of assets in securities denominated in foreign currencies.

The fund will be sub-advised by TCW Investment Management Company’s team, including Tad Rivelle, Chief Investment Officer – Fixed Income and Generalist Portfolio Manager; Stephen M. Kane, Generalist Portfolio Manager; Laird Landmann, Co-Director – Fixed Income and Generalist Portfolio Manager; and Brian T. Whalen, CFA, Generalist Portfolio Manager.

“Given the increased market demand for actively managed fixed income ETFs, we believe this offering will provide another means for investors to access our team-based, value approach to managing fixed income portfolios,” Kane said in a note.