Bonds. Frequently reliable, often rewarding, and almost always a dry topic. Fixed income helps balance equities volatility, with even high-yield or junk bond funds offering a counterweight to stock market exposure. That said, bonds also need a refresh once in a while, and there are some notable reasons why now may be the time to do so.
ETFs can offer that refresh for bond portfolios.
See more: American Century Investments’ Greenblath Appears on ETF Prime Podcast
Tax-Loss Harvesting Season Offers an Opportunity
It’s here once more, and has been for weeks: tax-loss harvesting famously ramps up as the year draws to an end. With just a few weeks left in 2025, investors and advisors are looking for investments they can sell at a loss to reduce their tax bills. That will leave many of those same investors looking at places to reinvest those assets. That presents an opportunity to refresh bond portfolios, whether via sold equities assets or swapping out disappointing bond ETFs.
Fed Uncertainty Looms
It’s normally hard to ignore the usual media circus around the Fed, but 2025 has been different. The central bank faces continued political pressure on top of some not-insignificant debates among its governors about inflation. Should the Fed stand pat, or should it cut rates to help boost an economy that may be slowing? A declining dollar looms in the background, as well. All of those factors play a role in the yield curve’s future. A bond portfolio refresh can add more flexibility and transparency via bond ETFs.
Investors Have More Bond Portfolio Options Than Ever
As the ETF landscape has continued to grow, investor options to craft a bespoke bond allocation have grown. Active bond ETFs, for example, may now be prepared to refresh bond holdings in a way mutual funds could not. For example, certain low cost bond ETFs using active or semi-active approaches can play core roles. Those funds offer transparency and flexibility as well as strong investing flexibility that can often outdo strictly passive offerings.
The Avantis Core Fixed Income ETF (AVIG ), for example, may offer a strong option. AVIG charges just 15 basis points (bps) to play a core role in bond portfolios. The fund invests in U.S. and non-U.S.-issued debt from corporations, governments, and more. Its framework assesses bonds’ potential capital appreciation and expected income as well as looking at expected returns.
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