Understanding Fed Effects on Corporate Bond ETFs

Group 1 - The inverse relationship between bond prices and yields is crucial for fixed income investors, particularly in the context of Federal Reserve actions [1][2] - The Neuberger Berman Flexible Credit Income ETF (NBFC) is positioned to benefit from Fed easing, as it includes both investment-grade and high-yield corporate debt [2][4] - Options-adjusted spreads (OAS) provide insights into risk and volatility in the credit markets, highlighting the differences between investment-grade and high-yield bonds [3][5] Group 2 - Junk bonds are particularly sensitive to interest rate changes, and their performance this year reflects expectations of Fed easing [4][6] - The volatility in high-yield corporate debt is generally higher than in investment-grade corporates, which justifies the higher yields investors receive [6][7] - The management of NBFC can help mitigate concerns regarding volatility, as the team actively manages the fund to navigate market conditions [7][8]