On the lookout for new options in fixed income? Many investors are likely considering making changes following the Fed’s rate cut. The cut itself may not have changed things on its own, but further comments from the Fed have some observers concerned. That, combined with spreads potentially widening due to the election, could see investors consider active fixed income.
See more: This Active Blue Chip ETF Is a Top Five YTD Performer
While many investors have historically picked a passive fixed income mutual fund and sat on it, it could be time to move to active. Active fixed income strategies can adapt more quickly in a complicated bond environment. Whether that means adapting to spreads, election volatility, or Fed discourse, active engagement can be a differentiator.
Even outside of volatility, however, active can set itself apart from passive when it comes to bonds. That’s because the world of bond expiration dates, yields, and prices can be fertile ground for managers with day-to-day experience therein.
Active ETFs, specifically, can prove to be useful tools for fixed income. ETFs offer tradability, transparency, and tax efficiencies that can set them apart from mutual funds. Combine those benefits with active, and active bond ETFs can provide a solid set of options. Especially as investors may be looking to make ETF moves as the year ends for tax reasons, now could be time to browse.
The T. Rowe Price Total Return ETF (TOTR) presents one intriguing potential option. The strategy will hit its three-year ETF milestone on Sept. 28. Charging only a 32 basis point fee, the fund actively invests in diversified debt securities on a total return basis. For those looking at active debt securities ETFs, TOTR could appeal.
For more news, information, and analysis, visit the Active ETF Channel.
