Displaying items by tag: fixed income etfs

Emerging market (EM) bonds are increasingly attractive as EM governments have shifted from deficits to surpluses, while developed markets (DM) have accumulated debt and fiscal imbalances. EMs maintain stronger fundamentals, including lower government and private debt, greater central bank independence, and higher real policy rates, factors that enhance stability and yield potential. 

Unlike DMs, EM policymakers have generally resisted moral hazard, allowing inefficient firms to fail rather than absorbing private risk, preserving long-term financial health. Over the past three decades, EMs have achieved persistent current account surpluses through fiscal discipline, contrasting with DMs’ crisis-prone fiscal dominance and policy coordination.

Actively managed EM strategies, such as VanEck’s, have demonstrated resilience through global shocks, reinforcing the case for a strategic EM debt allocation in modern portfolios.

Finsum: With DMs constrained by debt and low yields, EM debt offers compelling diversification benefits, higher returns, and sounder fundamentals.

U.S. Treasury yields fell sharply on Thursday, with the 10-year yield dropping below 4% following a weaker-than-expected Philadelphia Fed survey showing deteriorating regional economic conditions. The 10-year Treasury yield declined over 7 basis points to 3.98%, while the 2-year yield dropped to 3.42% and the 30-year fell to 4.59%, marking their lowest levels in months. 

The decline came as stocks tumbled, led by bank shares, amid growing concern over bad loans, trade tensions, and the ongoing U.S. government shutdown. With the shutdown delaying key economic reports, investors are turning to Fed speeches for clues ahead of the October 28–29 FOMC meeting, where futures markets now overwhelmingly price in a 25-basis-point rate cut.

Federal Reserve officials offered conflicting views on how quickly to cut interest rates given a weakening labor market and geopolitical uncertainty. 

Finsum: Now could be the time to jump on treasuries as yields slump and prices are driven up on the uncertainty. 

Derivative income ETFs, built around covered call strategies, have surged in popularity as investors seek higher yields. These funds generate income by selling call options on stocks or indexes, with the trade-off being limited upside potential during strong market rallies. 

Yields can vary widely depending on how aggressively options are written, with higher payouts often signaling greater risk. The largest products in this space track benchmarks like the S&P 500 and Nasdaq, though smaller providers have introduced sector and single-stock versions. 

While income potential is attractive, investors should weigh opportunity cost, since these strategies often trail the broader market over time. 

Finsum: With interest rates likely to fall, option premiums, and thus fund income, may decline, but yields remain compelling compared to traditional dividend ETFs.

The Nationwide Strategic Income Fund (NWXHX) has surpassed $1 billion in assets under management, reflecting strong investor demand and consistent outperformance. Since its 2015 inception, the fund has averaged a 6.07% annual return, 2% higher than its peer group, and earned a 5-star Morningstar rating. 

Its flexible, benchmark-agnostic strategy allows the fund to adapt to changing markets, guided by a seasoned management team with over a century of combined experience. The fund invests across fixed income sectors and can serve as a core or complementary bond holding. 

Following Amundi US’s merger with Victory Capital, the fund was renamed in June 2025 but retained its structure, management, and investment approach. As its profile rises, Nationwide emphasizes institutional-level oversight and manager selection to deliver long-term value.

Finsum: Strategic income invests across fixed income sectors and can serve as a core or complementary bond holding.

Fidelity's Enhanced High Yield ETF (FDHY) recently reduced its expense ratio from 45 to 35 basis points, making it one of the most cost-effective active high-yield bond ETFs among the top 10 in its category. 

This reduction is projected to save shareholders approximately $331,000 annually, highlighting the importance of expense ratios in maximizing investor returns. Unlike passive strategies that track high-yield bond indexes, FDHY employs a quantitative, rules-based approach, screening for bonds with strong return potential and low default risks. 

This active methodology allows the fund to exploit market inefficiencies, providing a potential edge over passive competitors. Since the expense cut in October, the fund has attracted over $24 million in net flows, demonstrating increased investor interest. 

Finsum: Keeping an eye on fees, particularly for active funds can really advance returns in a macro environment.