Fixed-Income Strategies and Indexing Innovations in ETFs

As the financial industry evolves and the markets environment shifts, fund sponsors have developed a number of strategies and innovative index-based exchange traded funds that have affected the way financial advisors build their investment portfolios.

Shaun Wurzbach, Global Head of Financial Advisor Channel Management at S&P Dow Jones Indices, spoke with Tom Lydon, Editor and Publisher of ETF Trends, to talk about the fixed-income space and ongoing innovation in the ETF space.

To start off, most financial advisors and investors typically center their strategy around the benchmark Barclays Agg, or Bloomberg Barclays Aggregate Bond Index, as their guidepost. However, the Agg’s market exposure has changed over the years, and not for the better.

“Most don’t understand that the Barclays Agg has changed a lot since the end of the financial crisis,” Lydon said. “The duration has doubled and the credit quality is decreased, so there’s a lot more risk there and we’re at the end of a 30-year bull market.”