Despite the recent turmoil in emerging-markets local bonds, they could be an attractive option based on valuations,” Morningstar said.
One Vanguard offering is the Vanguard Emerging Markets Government Bond Index Fund ETF Shares (VWOB A+).
“Through these ETFs, investors now have an approach that allows them to build a core fixed income portfolio, capturing both the investment grade and high yield universes, while also incorporating sophisticated credit hedge overlays to help protect against sudden shifts in credit spreads
The fund’s core bond exposure will be delivered via the low-cost, highly liquid iShares Core U.S. Aggregate Bond ETF (AGG) with a credit hedge overlay consisting of a combination of CDX calls, quality-junk factor-based hedges, or SPX puts, selected opportunistically by the Simplify team, according to a statement from the firm.
With inflation data weighing heavy on the capital markets, an active management strategy to help navigate the fickle bond markets while getting yield is a must.
TAGG seeks to outperform the Bloomberg U.S. Aggregate Bond Index.
Build Asset Management, an asset management firm specializing in strategies focused on fixed income and options, just launched the BUILD Bond Innovation ETF (NYSE Arca: BFIX), a bond allocation fund designed for a modern global environment defined by low interest rates and constrained economic growth.
Xtrackers by DWS has launched an ETF providing dynamic risk-controlled exposure to U.S. dollar high-yield corporate bonds.
Business loans are picking up, which can open up opportunities for savvy fixed income investors looking to get extra yield.
For example, the Simplify Interest Rate Hedge ETF (PFIX) seeks to hedge interest rate movements from increasing long-term interest rates.
The majority of the outperformance in 2021 came from the energy sector, where fallen angels are overweight the broad high yield index by more than 2x,” writes Nicolas Fonseca, VanEck associate portfolio manager.
Bonds with a higher credit risk can offer attractive yields, but for the more risk-averse investors, quality is needed to ensure stability of income.
“An index of debt issued by developing nations denominated in their own currencies has returned about 1% over the past three months, while a similar gauge of hard currency bonds has tumbled 2.9%, according to data compiled by Bloomberg,” reports Bloomberg outperformance has come amid optimism the proactive central-bank policy was enough to get ahead of inflation, and should mean that further tightening is now less necessary into 2022
“Wall Street’s biggest banks are expected to hit the corporate bond market after they report quarterly results in an effort to raise money before the Federal Reserve knocks borrowing costs higher,” Bloomberg reports.
BNDW seeks to track the performance of the Bloomberg Global Aggregate Float Adjusted Composite Index, which measures the investment return of investment-grade U.S. bonds and investment-grade non-U.S. dollar-denominated bonds.
Charles Schwab has trimmed the fees on five fixed income ETFs that provide core Treasury and corporate bond exposure.