As more and more investors look to active investing, many are now turning to active ETFs for their fixed income allocations. With their flexibility, transparency, and tax efficiency, ETFs have taken the investing world by storm. By adding active investing to the ETF wrapper, investors can refresh staid passive approaches to bonds, especially for core allocations. One active core bond ETF in particular has started off 2025 well, sending a key buy signal per YCharts analysis.
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That fund, the ALPS Smith Core Plus Bond ETF (SMTH ), has seen its AUM rise by more than $150 million to start the year. SMTH charges a 59 basis point fee for its active core bond ETF approach. SMTH actively invests in global debt securities of any maturity or credit quality, targeting an above-average total return.
The strategy applies a bottom-up approach, aiming to balance current income and capital appreciation. Specifically, it seeks out mortgage-backed securities, corporate bonds, convertible bonds, and more. That approach has helped the strategy outperform the Bloomberg U.S. Aggregate Total Return Index over the last five years. SMTH returned 9.1% in that time, per YCharts data, compared to 6.4% for the Agg.
What’s more, the fund has also seen its price rise above both its 50- and 200-day simple moving averages (SMAs) over the last week or so. That traditionally indicates a buy signal and a healthy degree of momentum for a given ETF.
Looking ahead, then, what kind of role could the active core bond ETF play? It may be the fund investors turn to in order to refresh their core allocations. Ahead of some notable uncertainty in the rate market, and a higher for longer rate regime, that approach could appeal. Its focus on income, too, could prove a welcome addition for those nearing retirement. Taken together, SMTH could prove a compelling fund to watch.
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