“So you’re a forced buyer after the price has gone up, you’re a forced seller after the price has gone down,” Suskind said on a panel at the Inside ETFs conference.
In addition, “there’s whole sections of the bond market you simply can’t access” with a passive ETF, Suskind added, pointing to U.S. non-agency mortgage bonds as one of his preferred investments. “You’re missing out on entire portions of the bond market including what we think are some of the best investments on the planet.”
Related: Vanguard to Move Big Bond ETF to Nasdaq from NYSE
Bond ETF investors interested in diversifying with an active manager at the helm have a number of options to choose from. For instance, Franklin Templeton recently launched the Franklin Liberty High Yield Corporate ETF (Cboe: FLHY), Franklin Liberty International Aggregate Bond ETF (Cboe: FLIA) and Franklin Liberty Senior Loan ETF (Cboe: FLBL). Additionally, the PIMCO Active Bond ETF (NYSEArca: BOND) act as an ETF version of PIMCO’s flagship Total Return Fund (NASDAQ: PTTRX).
For more information on the fixed-income market, visit our bond ETFs category.