As active ETFs gain more and more attention, active bond ETFs have taken on new prominence. Where historically, many investors looked to active mutual funds for their bonds; with thematic equity ETFs, more and more investors are turning to active bond ETFs. Amid the rise of active ETF AUM and launches, then, refreshing fixed income allocations with active bond ETFs could boost portfolios. For example, the active total return bond ETF TOTR has stood out over the last month with a sudden AUM spike.
See more: T. Rowe Price Exceeds $10 Billion in ETF AUM
The T. Rowe Price Total Return ETF (TOTR ) launched in September 2021. Charging only a 32 basis point fee, the active total return bond ETF seeks to maximize performance via a diversified set of debt securities. The strategy’s managers have the flexibility to invest in corporate bonds, bank loans, agency debt.
Active Total Return Bond ETF TOTR Up
That approach helped the fund add more than $100 million over the last month, per ETF Database. TOTR entered February at around $130 million in AUM. As of February 14, the strategy sat at $234 million, a significant jump.
The inflows that drove that spike may speak to a growing desire for active fixed income. Government uncertainty looms over Treasurys and yields. What’s more, with the Fed set to hold rates for some time yet, amid pressure from above, active flexibility may be needed.
The active total return bond ETF offered a 5.26% 30-day SEC standardized yield as of January 31, per T. Rowe Price data. The fund itself returned 2.4% over one year, as well. Taken together, the strategy’s tight scrutiny of various bonds can help it outperform and boost portfolios amid uncertainty.
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