ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Gold/Silver/Critical Minerals
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Modern Alpha
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Core Strategies Channel
  2. With a Rise in Recession Fears, Consider These Active Bond Funds
Core Strategies Channel
Share

With a Rise in Recession Fears, Consider These Active Bond Funds

Ben HernandezAug 26, 2022
2022-08-26

Inflation fears may have dissipated in July, but the recession narrative is growing. As such, investors are focusing on bonds once again as a safe haven escape if economic growth suffers from rising interest rates.

To start the first half of the year, both stocks and bonds were faltering amid inflation fears, but the latter could be diverging into more upsides while the former trends lower. Too much optimism could be mounted in what could be nothing more than a bear market rally.

“What we’ve seen at this juncture is a bear market rally and we don’t want to chase it,” said  Wei Li, global chief investment strategist at BlackRock Inc, in a Bloomberg article. “I don’t think we’re out of the woods with one month of inflation cooling. Bets of a dovish Fed pivot are premature and earnings don’t reflect the real risk of a U.S. recession next year.”

Getting bond exposure is available with active exchange traded funds (ETFs) that give investors dynamic flexibility in the bond markets. One option to consider for corporate bonds is the American Century Diversified Corporate Bond ETF (KORP C+), which offers investment-grade quality debt holdings.

The fund seeks current income by emphasizing investment-grade debt while dynamically allocating a portion of the portfolio to high yield. Per its product website, KORP creates a systematically managed portfolio that integrates fundamental and quantitative expertise that:

  • Adjusts investment-grade and high yield components to balance interest rate and credit risk.
  • Screens individual credits to seek those with sound fundamentals, reduced default risk, attractive valuations, and liquidity.
  • Adjusts industry and duration exposures as risks and opportunities emerge.

A Muni Bond Option

Municipal bonds are also another option, giving investors fixed income that’s free from federal taxes. Also using an active management strategy, a fund to consider is the American Century Diversified Municipal Bond ETF (TAXF B).

The fund seeks to provide consistent tax-free income by employing an active, research-driven process that draws from across the municipal bond universe and adjusts exposure depending on prevailing market conditions. As with local government bonds in the U.S., credit risk is minimized with close to 80% of the fund ranging in debt rated at AAA to A (as of May 31).

Both funds also feature a low expense ratio of 29 basis points. This should appeal to cost conscious investors who may typically view actively managed funds as too expensive to consider.

For more news, information, and strategy, visit the Core Strategies Channel.


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X