A Bond ETF to Enhance Upon Traditional Barclays Agg Exposure

Many have turned to the benchmark Barclays Aggregate Bond Index as a guiding beacon for their fixed-income allocations, but the current low-yield environment has caused investors to rethink the way they gain exposure to bonds and exchange traded funds.

ETF Trends publisher Tom Lydon spoke with Jordan Farris, Head of Product Development at NuShares from Nuveen, at the 2017 Morningstar Investment Conference in Chicago April 26-28 to talk the changing views on optimal fixed-income asset allocations.

“Allocations within the Barclays Agg have gone sort of against what I think a lot of investors are looking for these days, which is yield,” Farris said. “If you look back over the past 20 or 30 years, the majority of the return on the Barclays Agg has actually been by the yield or the coupon.”

The Barclays Agg’s yield is only a shadow of its past, diminishing the appeal for what many yield-seekers are looking for. This is especially the case as the baby boomer generation are easing into retirement and more are demanding steady yielding assets to help them through their Golden Years. Moreover, we are living longer and many are entering retirement with more debt than their parents, which further fuel the need for income.