Get Active with Fixed Income During These Uncertain Times

During uncertain times like today’s pandemic-ridden economy, it’s difficult to navigate the market environment with the same gusto during the extended bull market. That said, when it comes to fixed income allocation, sometimes it’s best to leave it up to the experts via active management.

“Even as equities have rebounded from their March lows, the economic and jobs data are mostly unsettling, with volatility remaining high. At best, the market environment is murky, with most experts expecting it to stay that way,” a Financial Advisor article noted. “Understandably, RIA executives are questioning how all this will impact profitability and valuations. While many could have fears bordering on the extreme, those feelings may not be entirely warranted.”

“That’s because most wealth management portfolios contain a mix of equity and fixed-income investments, and as a result have not experienced the same type of declines as broader market indexes,” the article added. “What’s more, it’s important to point out that the industry standard practice is to value firms based on their rolling four-quarter performance.”

An Active Fixed Income Option

For fixed income investors seeking a fund with an active management component, they can look to the Principal Active Income ETF (YLD). YLD is an actively managed fund that seeks to achieve its investment objective by investing its assets in investment grade and non-investment grade fixed income securities and in equity securities.

The fund’s Sub-Advisors, actively and tactically allocates the fund’s assets among fixed income securities and equity securities in an effort to take advantage of changing economic conditions that the Advisor believes favors one asset class over another.

YLD features the following:

  • Active management: An agile manager acting as an advocate for investor assets can make strategic or tactical changes to adapt to shifting market conditions or expectations.
  • Multi-asset approach: Assets are allocated across various income-producing asset classes to optimize portfolio stability, efficient growth, and income with a defensive quality bias.
  • A consistent approach aimed at consistent returns: A focus on long horizon, specialist managers to fulfill nuanced exposures while maintaining ETF transactional efficiency.

Getting Active with Equities

Choosing the right equities could also use an active touch as opposed to the traditional passive index strategy. As such, investors can opt for the Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (GSLC).

GSLC seeks to provide investment results that closely correspond to the performance of the Goldman Sachs ActiveBeta® U.S. Large Cap Equity Index. The index is designed to deliver exposure to equity securities of large capitalization U.S. issuers.

For more market trends, visit ETF Trends.