5 Years In, This ETF Charts a New Path for Core Bond Funds

Core Insights - The SEC's 2019 ETF rule has significantly streamlined ETF product development, leading to a surge in new ETF launches, particularly benefiting active ETFs in the bond market [1][2] - The Avantis Core Fixed Income ETF (AVIG), launched in October 2020, exemplifies the active ETF approach to core bond funds, charging a competitive fee of just eight basis points [2][3] - AVIG focuses on global investment-grade debt securities, aiming for a weighted average maturity close to that of the Bloomberg Barclays U.S. Aggregate Bond Index, and employs an analytical approach to assess expected income and capital appreciation [2][3] Performance and Appeal - AVIG's strategy emphasizes outperformance and lower costs, distinguishing it from traditional mutual fund core bond offerings, while providing greater transparency and flexibility [3] - The active management of AVIG allows for quicker adaptation to market changes, such as replacing defaulted securities more efficiently than passive funds [3] - Year-to-date, AVIG has returned 7%, indicating strong performance and making it an appealing option for investors looking to refresh their core bond allocations [3]