Navigating the Current Fixed Income Market With MFS

Core Insights - The fixed income market is currently navigating a challenging macroeconomic landscape characterized by uncertainty from tariffs, geopolitical tensions, and changing interest rate policies [2][4] - Despite these challenges, the broader fixed-income market remains resilient, particularly for assets with strong credit fundamentals like investment-grade debt [2][3] Macroeconomic Risks - Four specific macro risks identified include growth, inflation, monetary policy, and fiscal policy, which will influence the fixed income market's future [3] - Credit risks are noted to be heightened but contained at present, indicating a stable environment in the investment-grade markets [3] Investment Opportunities - There are still opportunities in the fixed income markets despite global unpredictability, suggesting that investors should not remain passive [4] - Active management strategies are recommended to navigate systematic and idiosyncratic risks in the bond market [5] Active Fixed Income Options - MFS offers two funds for fixed-income exposure: the MFS Active Core Plus Bond ETF (MFSB) and the MFS Active Intermediate Muni Bond ETF (MFSM) [5] - The MFSB fund employs a primarily investment-grade bond strategy that integrates macro, bottom-up, and technical perspectives for value addition [6] Municipal Bonds - Municipal bonds have gained attention this year due to strong credit fundamentals and attractive yields, along with the benefit of federal tax-free income [7] - The MFSB fund aims to exploit inefficiencies in municipal credit markets through active management, focusing on intermediate maturities for yield opportunities [7] Cost Efficiency - Both MFSB and MFSM funds have competitive expense ratios of 34 basis points, equating to $34 per $10,000 invested, making them cost-effective options for investors [8]