Income ETF strategies have become a key part of the portfolio toolbox in recent years. The ETF’s flexibility, and the ETF rule in 2019, have supercharged innovation as more shops look to join the competitive landscape. American Century Investments has been a big part of that storyline, with funds like MUSI, the active multisector ETF, a particularly appealing option right now.
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(MUSI ), the American Century Multisector Income ETF, charges a 38 basis point fee to actively invest across the fixed income landscape. Where it differs from traditional fixed income ETF sources of current income is in its broad remit to invest across debt offerings. MUSI, leaning on the freedom and managerial expertise of active management, will also celebrate its fifth year of operation this June, per ETF Database data.
Could a Multisector Income ETF Approach Make for a Key Satellite Holding?
Specifically, MUSI invests in a global bond portfolio without a particular target duration in mind. Its managers invest in a broad group of debt offerings from high yield to bank loans, securitized to emerging markets debt. Crucially, the strategy can also use preferreds, convertible securities, and other equity tools as needed to add income. MUSI’s active managers use a sector rotation strategy driven by quantitative as well as fundamental inputs to help guide their decisions.
Together, that has helped MUSI return 6.4% over the last one year period per ETF Database data. That has outperformed the ETF Database Total Bond Market Category average in that time, with the average coming in at 5.45% for that time frame.
In terms of delivering current income, how does this active income ETF perform? According to American Century Investments data the fund provided a Weighted Average Coupon of 5.49% as of February 28. It offered a 5.66% 12-month distribution rate as of February 27, as well.
Those backward-looking numbers certainly paint an appealing picture, but what can the income ETF offer for the rest of 2026? Its broad remit and freedom to invest across debt sectors allow its managers greater potential to get that crucial income. Especially in such a complicated financial and geopolitical landscape right now, that fundamental flexibility could prove a shrewd option this year.
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