VettaFi Symposium: Leading Asset Managers Talk Active Fixed Income ETFs

Core Insights - Active fixed income ETFs have seen significant growth in both number and assets under management (AUM) since the introduction of the ETF rule in 2019, driven by increasing investor interest in fixed income [1] - The VettaFi 2026 Market Outlook Symposium highlighted discussions on active fixed income strategies, featuring insights from leaders at PIMCO and Goldman Sachs Asset Management [2][3] Investment Themes for 2026 - Investors are encouraged to move out of cash, as the Federal Reserve continues to cut rates, potentially bringing yields closer to 3% or 3.5%, making it an opportune time to lock in attractive yields [5][6] - Upgrading core fixed income allocations is recommended, with a focus on active management, particularly in longer-duration bonds [6] - Tax-optimized strategies are also emphasized as a key focus area for investors [6] Fixed Income as a Diversifier - Fixed income is regaining its role as a diversifier, with equities and bonds showing inversely correlated performance [7] - High-quality bonds are highlighted as offering yields of 5%, 6%, and 7%, providing significant opportunities for investors [6][7] Specific Investment Opportunities - Securitized products and high-quality agency-backed mortgages are identified as attractive investment opportunities, offering yields comparable to investment-grade credit [8] - PIMCO is currently underweight in corporate credit, suggesting that there are unique opportunities in the market that differ from traditional expectations [9][10] Active Fixed Income ETF Usage - A survey of panel attendees revealed that 43% use active fixed income as a core allocation, while 28% use it across core and satellite options [10] - PIMCO and Goldman Sachs both offer a variety of active fixed income ETFs, such as the PIMCO Mortgage-Backed Securities Active ETF (PMBS) and the GS Corporate Bond ETF (GIGL), which charge 88 basis points and 29 basis points respectively [11][12]