A Bright Outlook for This Active Bond ETF

Core Insights - The Federal Reserve has implemented two interest rate cuts in 2023, which is expected to positively impact actively managed bond ETFs like the Neuberger Berman Total Return Bond ETF (NBTR) [1][2] - NBTR, approaching its two-year anniversary, has outperformed the Bloomberg U.S. Aggregate Bond Index, with a year-to-date gain of approximately 8% compared to the index's gain of slightly over 7% [2] - Goldman Sachs Asset Management anticipates further rate cuts by the Fed, predicting a 25 basis point cut in both October and December, followed by two additional cuts in 2026 [3][4] Fund Performance and Strategy - NBTR's active management strategy is highlighted as a key differentiator in its performance this year, with expectations for continued strong performance into 2026 [2] - The fund has a 30-day SEC yield of nearly 5% and a duration of 5.85 years, positioning it in the intermediate-term bond category, which may attract more investors due to its compelling yields [6] Market Context - The potential end of the longest government shutdown on record could benefit active fixed income ETFs, including NBTR, although the Federal Reserve's actions remain a significant factor [3] - Historical trends suggest that the dollar may stabilize following the start of Fed easing cycles, which could make dollar-denominated debt, including bonds in NBTR, more attractive to global investors [5]