For advisors looking for a potential safe haven from volatile macro conditions, fixed income has emerged as a popular choice. Even as the U.S. markets face volatility, a fixed income portfolio can simultaneously provide income, capital appreciation, and crucial diversification. These advantages are bolstered further by the potential for interest rate cuts later this year. Should the Fed opt to cut rates, bond yields could offer even stronger income.
While opportunity may be knocking for more bond exposure, choosing the right fixed income strategy remains as crucial as ever. In a recent article, experts from the American Century Investments team made the case for why it may be the right time for active fixed income ETFs.
As the American Century team notes, a crucial advantage active bond ETFs can offer over passive peers is the benefits of a more flexible strategy. Meanwhile, passive fixed income ETFs are often limited to the boundaries of their respective index. This can leave a passive ETF overexposed to potentially disadvantageous bond issuers and credit sectors.
“Active managers seek to uncover value across the fixed-income spectrum, including the new-issues market,” the article added. “They can invest in places that popular market indices often ignore, such as smaller and underfollowed sectors, securities, issuers and countries. Additionally, active managers are free to exit securities they believe have reached their valuation potential, while passive indices must continue holding them if they’re a benchmark component.”
What MUSI Brings to a Bond Portfolio
For investors looking to add active fixed income ETFs to their portfolios, the American Century Multisector Income ETF (MUSI ) may be the right fund for the job. An actively managed fund, MUSI offers income and capital appreciation through a variety of different bond sectors. This includes exposure to investment-grade and high yield corporate bonds, emerging market debt, and mortgage-backed securities, among other sectors.
The active portfolio team behind MUSI chooses its sector, credit, and duration exposure through data-driven analysis. This active process could put the fund in a better position to deliver results while offering an attractive risk profile.
In the meantime, MUSI is currently offering compelling yield opportunities for its investors. As of April 30, 2025, the fund has a yield to maturity of 6.78%.
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