Bonds: Total Market

JPMorgan Asset Management recently announced the upcoming launch of three new fixed-income BetaBuilders ETFs. The funds, which will launch in February, will provide exposure to the aggregate, investment-grade corporate, and high-yield corporate bond markets. All three will be converted from three existing actively managed ETFs. The JPMorgan BetaBuilders US Aggregate Bond ETF (BBAG) will be created from the $1.2 billion JPMorgan US Aggregate Bond ETF (JAGG). The fund, which will come with an expense ratio of 0.03%, will track the Bloomberg US Aggregate Bond Index and invest in Treasury, government-related, corporate, and securitized fixed-rate bonds from issuers worldwide. The JPMorgan BetaBuilders USD Investment Grade Corporate Bond ETF (BBCB) will be converted from the $40 million JPMorgan Corporate Bond Research Enhanced ETF (JIGB). BBCB will track the Bloomberg US Corporate Bond Index, consisting of investment-grade bonds from corporate issuers worldwide. The ETF has an expense ratio of 0.09%. The final ETF, the JPMorgan BetaBuilders USD High Yield Corporate Bond ETF (BBHY), will be created from the $400m JPMorgan High Yield Research Enhanced ETF (JPHY). BBHY will track the ICE BofA US High Yield Total Return Index, covering sub-investment-grade, corporate bonds issued in the US market. The fund has a slightly higher expense ratio of 0.15%


Finsum:JPMorgan adds to its suite of BetaBuilders ETFs with the upcoming launch of aggregate, investment-grade corporate, and high-yield corporate bond ETFs.

There is no doubt that government bond and corporate debt markets have taken a beating this year due to inflation and rising interest rates. But that may change next year if two fixed-income strategists are correct. On Tuesday, Gurpreet Gill, macro strategist, global fixed income at Goldman Sachs Asset Management said that “The year ahead is shaping up as the most promising for fixed income in over a decade.” While speaking at the Edelman Smithfield Investor Summit in London, Gill noted that valuations in fixed-income markets were looking more appealing than they were a year ago. This included emerging markets and corporate bonds. She stated, "We think it makes sense to be in high-quality short-duration assets, in agency mortgage-backed securities markets in the U.S." Gill isn’t alone in those thoughts. Sara Devereux, global head of Vanguard Fixed Income Group, said last Friday that “The recent debt rally brought the chance to reduce credit exposure and buy mortgage agency securities based on valuations, setting up what promises to be a bond picker’s paradise in the new year.”


Finsum:Two fixed-income strategists expect next year to be a great year for bond pickers due to lower valuations.

Invesco continues to expand its ETF lineup with the launch of four new actively managed ETFs. The new fund offerings include the Invesco AAA CLO Floating Rate Note ETF (ICLO), the Invesco High Yield Select ETF (HIYS), the Invesco Municipal Strategic Income ETF (IMSI), and the Invesco Short Duration Bond ETF (ISDB). All four funds were launched last Friday and trade on the CBOE. ICLO, which has an expense ratio of 0.26%, invests in floating-rate note securities issued by collateralized loan obligations (CLOs) that are rated AAA or equivalent. HIYS invests in higher quality below investment grade fixed income securities, such as corporate bonds and convertible securities. The fund charges 0.48%. IMSI has an expense ratio of 0.39% and invests in municipal securities exempt from federal income taxes and in other instruments that have similar economic characteristics. ISDB invests in fixed-income securities such as high-yield bonds and other similar instruments and aims to maintain a portfolio maturity and duration between one and three years. The ETF charges 0.35%.


Finsum:Invesco bolsters its active stable of ETFs with the launch of four fixed-income ETFs that invest in CLOs, high-yield bonds, munis, and short-duration bonds.

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