The sheer size of the fixed income market makes it a complex space to navigate. In a recent article and accompanying video titled “Pursuing Alpha: Our Active Fixed Income Approach,” an accompanying video explains how MFS Investment Management deftly navigates a complex fixed-income market.
The fixed-income market is rife with uncertainty, as the same obstacles facing equities are also affecting fixed income. From interest rate policy, tariffs, geopolitical tensions, and other systemic risks, active management is almost paramount in this current market environment.
As such, MFS active ETFs tap into the knowledge and expertise of its portfolio managers, who know how to navigate the nuanced fixed income market. The bond market certainly has its own unique set of idiosyncrasies that only those familiar with its various subcategories can navigate.
“While the fixed income solutions we deliver at MFS are diverse, they share a common approach centered on budgeting and allocating risk intentionally and prudently,” said MFS’ Co-CIO of Fixed Income, Alexander Mackey. “We actively calibrate risk, aligning our fundamental viewpoints and valuation assessments.
“A defining attribute of our fixed income approach is the structured manner with which our highly specialized portfolio management, research, and trading teams intensively connect and share information across our entire MFS investment organization,” he added.
2 Active Options in Fixed Income
When considering active alternatives in fixed income, take a close look at the MFS Active Core Plus Bond ETF (MFSB) and the MFS Active Intermediate Muni Bond ETF (MFSM). The former can serve as an investor’s core fixed income exposure, while the latter identifies opportunities in intermediate-maturity municipal bonds.
Per the MFSB fact sheet, the fund uses a “primarily investment-grade bond strategy that integrates macro, bottom-up, and technical perspectives in an effort to add value through sector and quality allocation, security selection, and also duration/yield curve decisions.” The fund could serve as a standalone exposure for investors looking for a core bond alternative.
That same fixed income approach to MFSB is also inherent in MFSM’s strategy focus. Ultimately, the fund exploits inefficiencies in municipal credit markets via active sector, quality, and security selection. Munis have been lauded for their federal tax-free income while also offering high yields and strong fundamentals in the current market. Adding an actively managed component to a nuanced muni market means MFS portfolio managers can look to maximize opportunities in intermediate muni debt for income and price appreciation.
Both MFSB and MFSM come with cost-effective expense ratios of 34 basis points.
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