If 2026 has offered anything so far, it has been more uncertainty for investors. Especially when it comes to interest rates and fixed income, questions arise about how investors should allocate to bonds. ETFs offer a wide range of opportunities, with plenty of bond strategy innovation. Especially in the core bond space, a fund like the core bond ETF AVIG could help navigate that uncertainty.
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The Avantis Core Fixed Income ETF (AVIG ) charges a 15-basis-point (bps) fee to offer an intriguing active-empowered core bond ETF approach. The strategy uses a “systematic” active approach that invests in bonds from U.S. and non-U.S. issuers. AVIG can invest in bonds issued by corporations, governments, government agencies, and other issuers.
It leans on bonds with high expected returns, based on an analytical framework that measures expected income and capital appreciation. AVIG’s managers assess bonds using metrics such as credit rating, duration, currency, yield, and option-adjusted spreads. It may also invest in credit default swaps and total return swaps as needed.
Together, that has helped the fund perform well over the last year, outperforming its ETF Database Category average. Specifically, AVIG has returned 7.9% over that time frame compared to 6.7% for the average. It has also outperformed over the last three years, too.
What role, then, might it play in portfolios? AVIG has an important advantage over other core bond ETF options – its active flexibility. Where passive core bond funds must track their index lists exactly, active funds can adapt. What’s more, if a passive bond fund sees bonds called early or default, it may not be able to replace them quickly.
Together, where many investors have relatively staid, passive core bond allocations, AVIG offers an upgrade opportunity. For those looking to get more from their fixed income, AVIG can appeal.
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