Smart Beta to Enhance the Passive Bond ETF Investing Experience

As fixed-income investors consider ways to diversify their portfolios, many are looking to smart beta bond ETFs to potentially enhance returns and diminish downside risks.

“What we are trying to do is really marry our product innovation with New York Life’s experience in income and equity investing, and really provide investors with the solutions that passive vehicles can not achieve,” Kelly Ye, Director for Research for IndexIQ, said at the 2018 Morningstar Investment Conference.

For example, while bond investors may still need a stable source of income-generating ideas, investors will have to look out for a rising interest rate environment and consider the risks in a prolonged bull market environment.