The case of active management in fixed income securities


AActive management remains an area where advisors and investors can be quite critical, but if you dig into last year’s flows, the asset really should be split into two different camps with two different performances. Investment News recently looked at the performance of active management, and some interesting findings have surfaced.

“Last year, active management basically ground to a halt, losing around $50 billion in net flows, but if you deconstruct that, it’s a story of two asset classes,” says analyst Eric Balchunas. Senior ETF at Bloomberg Intelligence.

Performance was dramatically different when active funds were split into two different categories: active equity funds and active bond funds. According to data from Bloomberg, active equity funds lost nearly $400 billion in flows last year, while active bond flows absorbed nearly $350 billion. This is a reflection of the pivoting market and also investor confidence in active managers within the fixed income space.

“The active drain is really running out of stock pickers,” Balchunas said.

Fixed income is where active ETFs and active managers really shine, consistently outperforming benchmarks and enjoying inflows into their funds as more and more investors allocate. In increasingly volatile and uncertain markets, the ability of active managers to optimally position their funds is a huge boon, especially in the struggling bond market.

Active management firm T. Rowe Price offers several ETF options in the bond space, including the T. Rowe Price Total Return ETF (TOTR)the T. Rowe Price QM US Bond ETF (TAGG)and the T. Rowe Price Ultra Short-Term Bond ETF (TBUX).

The company brings a wealth of experience and research to its products, with portfolio managers averaging more than 20 years of investment experience each, as well as more than 400 investment professionals dedicated to research. of companies within ETFs.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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