Don’t Wait for Wider Spreads to Target Fixed Income

After an historically bad year for bonds, many are now saying that fixed income is living up to its name. Yet many investors are still waiting for credit spreads to widen. However, with yields now double what they were at the beginning of last year, now could be a good time to add some fixed income to an investor’s portfolio.

“The income is back in fixed income,” said JoAnne Bianco, a partner of BondBloxx Investment Management, adding that yields for most fixed income assets represent “an over doubling of yields since the beginning of last year.”

There are many opportunities to be had within the asset class, especially since the bond landscape is markedly different now than it was a year ago. Plus, now that we’re in a higher-yielding environment, fixed income provides a cushion to one’s portfolio that allows the investor to seek out some of these somewhat riskier and longer-duration bond offerings.

For investors looking to add Treasury bond ETFs to their portfolios, BondBloxx offers a suite of eight duration-specific U.S. Treasury ETFs, with durations ranging from six months, through the BondBloxx Bloomberg Six Month Target Duration US Treasury ETF (XHLF), to 20 years, via the BondBloxx Bloomberg Twenty Year Target Duration US Treasury ETF (XTWY).

See more: “BondBloxx Reaches $1B in Assets, Partners With Macquarie Asset Management

BondBloxx’s duration-specific Treasury ETFs offer exposure to U.S. Treasury Securities by tracking a series of indexes developed by Bloomberg Index Services that include duration-constrained subsets of U.S. Treasury bonds with more than $300 billion outstanding.

Meanwhile, investors seeking higher-yielding opportunities may want to consider one of three ratings-specific high-yield bond ETFs that BondBloxx offers, including what co-founder Joanna Gallegos described as “the Goldilocks of high yield:” the BondBloxx B Rated USD High Yield Corporate Bond ETF (XB), which seeks to invest in bonds rated B1 through B3.

Launched in October of 2021 to provide precision ETF exposure for fixed income investors, BondBloxx offers a range of ETFs spanning U.S. Treasuries, industry- and credit rating-specific high yield bonds, and emerging markets bonds.

“BondBloxx has continued to launch innovative products since its founding and has expanded the ETF universe with targeted products where there is white space,” said Todd Rosenbluth, head of research at VettaFi. “Their broad range of fixed income funds makes them a firm to watch as the asset category grows.”

For more news, information, and analysis, visit the Institutional Income Strategies Channel.