In a shifting interest rate environment, fixed-income ETF investors have to quickly adapt to the changing market.
On the upcoming webcast (available live and on demand for CE Credit), The Fed, Factor Investing and Fixed Income, Martin Kremenstein, Senior Managing Director and Head of ETFs at Nuveen, Joshua Jenkins, Portfolio Manager for CLS Investments, will address the fixed-income outlook for the remainder of the year and look to factor-based, fixed-income strategies that can act as an alternative to traditional bond investments.
For instance, the NuShares Enhanced Yield 1-5 Year U.S. Aggregate Bond ETF (NYSEArac: NUSA) and the NuShares Enhanced Yield U.S. Aggregate Bond ETF (NYSEArca: NUAG) may help fixed-income investors take an alternative approach to bond investing.
The NuShares Enhanced Yield 1-5 Year U.S. Aggregate Bond ETF tries to reflect the performance of the BofA Merrill Lynch Enhanced Yield 1-5 Year US Broad Bond Index, which is represented by a modified version of the more widely observed BofA Merrill Lynch 1-5 Year US Broad Market Index.
The Enhanced Index does not weight components by market capitalization, instead opting to assign components into a variety of categories based upon asset class, sector, credit quality and maturity. The smart beta indexing methodology then utilizes a rules-based process to include higher weights to categories with higher yields while maintaining risk and credit quality at levels similar to the Base Index.