Improving Junk Bond Quality Could Boost This ETF

Group 1 - The core sentiment regarding junk bonds is becoming increasingly positive, suggesting a favorable economic climate for these assets heading into 2026 [2] - BNP Paribas anticipates a slowdown in GDP growth to a range of 1.5% to 2%, which is seen as supportive for high-yield bonds [3][7] - The Neuberger Berman Flexible Credit Income ETF (NBFC) has a significant allocation of 39.6% to non-investment grade bonds, indicating its focus on junk bonds while maintaining a diversified credit approach [4][5] Group 2 - The actively managed nature of NBFC allows for flexible adjustments in non-investment grade allocations based on market conditions, which can enhance credit quality [5] - High-yield corporate bonds do not necessarily require strong equity market performance to achieve good returns, making them potentially attractive in a modest growth environment [6][7] - There is a growing demand for higher quality junk bonds, particularly those with potential for upgrades, which aligns with NBFC's strategy of allocating over 30% to the highest non-investment ratings [8]