Adaptability Will Be Crucial in Fixed Income in 2026

Core Insights - Fixed income ETFs, particularly Neuberger Berman Total Return Bond ETF (NBTR) and Neuberger Berman Short Duration Income ETF (NBSD), have shown decent performance in 2023, but past performance does not guarantee future results [1][5] - Investors in fixed income need to be agile and adaptable in 2026 due to changing Federal Reserve policies and economic conditions [2][4] Market Outlook - The future of interest rate cuts is uncertain, with inflation remaining stubborn and potential US tariff policies possibly increasing prices in 2026, indicating a shift towards structurally higher inflation [3][6] - The Federal Reserve is not expected to lower rates soon, but there is speculation about potential leadership changes that could influence future rate decisions [4][5] Investment Strategy - A flexible, diversified, and dynamic approach to bond investing is essential moving into 2026, as traditional passive fixed income funds may not perform as well [6][7] - Higher volatility in the fixed income market has created a wider performance gap, emphasizing the need for a global and flexible investment strategy [7]