Core Insights - Coign Capital Advisors increased its stake in the Eaton Vance Total Return Bond ETF by 89,612 shares in Q3, valued at approximately $4.6 million based on average share price [2][6] - The acquisition raised EVTR's share to 8.5% of Coign's reportable assets under management, making it the largest holding in the fund [3][6] - As of September 30, Coign held a total of 298,819 shares of EVTR [2] ETF Overview - The Eaton Vance Total Return Bond ETF has assets under management (AUM) of $3.6 billion and a current price of $51.55, reflecting a 2.3% increase over the past year [4][3] - The fund's one-year total return stands at 7.1% [4] Investment Strategy - EVTR focuses on a diversified portfolio of U.S. dollar-denominated, investment-grade fixed-income securities, including government, corporate, municipal, and mortgage- and asset-backed bonds [5] - The fund aims to balance income generation with capital preservation through broad sector and issuer diversification, targeting institutional investors seeking stable income [5] Market Context - Coign's purchase of EVTR aligns with a defensive investment strategy as yields stabilize, indicating a shift towards balanced fixed-income exposure [6][7] - The fund has returned approximately 7% year-to-date with a 30-day SEC yield of 4.7%, investing across Treasuries, corporate credit, and securitized debt [7] - The moderate yield-to-worst of 5.38% and the mix of investment-grade bonds are appealing for long-term investors seeking steady income with lower duration risk [9]

Economic Overview - The recent Consumer Price Index (CPI) report showed inflation cooler than expected, leading to a slight dip in the 10-year yield, which is currently hovering around the key 4% level [1][3][9] - On a relative basis, the CPI came in below expectations, which was positively received by the market, resulting in a rally in treasuries [2][3] Inflation Insights - Despite the positive relative performance, inflation remains above the Federal Reserve's 2% target, indicating ongoing concerns [3][4] - The CPI report revealed mixed trends, with some components like owner's equivalent rent decreasing, while goods prices, particularly in apparel, are starting to rise, potentially due to tariff impacts [7][8] Interest Rate Expectations - There is an expectation for a 25 basis point rate cut, with the likelihood of this occurring next week or possibly in December, depending on economic developments [4][6] Fixed Income Opportunities - The fixed income market presents attractive opportunities, particularly in the municipal bond sector, which offers tax-exempt interest income and generally high credit quality [10][11] - The current yield environment, especially after recent years, is considered attractive for investors seeking income options [9][10]

Core Insights - The article discusses the appeal of municipal bonds as a tax-efficient investment option for investors looking to reduce capital gains payments as the tax year ends [1][2] - Active ETFs, particularly those focused on municipal bonds, are highlighted as a way to maximize returns while benefiting from tax exemptions [3][4] Group 1: Municipal Bonds Appeal - Municipal bonds are positioned as a solid alternative for fixed income assets, especially as certain bond segments lose appeal due to falling rates [2] - The tax-exempt nature of municipal bonds can significantly reduce the total tax bill for investors, which is particularly relevant if the stock market performs well in 2025 [2] Group 2: Active ETFs and Performance - The T. Rowe Price Intermediate Municipal Income ETF (TAXE) is presented as a strong option, charging a fee of 24 basis points while actively investing in municipal bonds exempt from Federal taxes [3][4] - TAXE has achieved a year-to-date return of 5.1% and offers a current yield of 4.44% as of September 30, showcasing its competitive performance [4]

Core Insights - Bluestem Financial Advisors purchased 105,000 shares of the Vanguard Total Bond Market ETF for approximately $7.7 million, making it the largest holding by value in their portfolio [2][6] - The Vanguard Total Bond Market ETF now constitutes 21.5% of Bluestem's reportable assets under management as of September 30 [3][8] - The ETF offers exposure to around 10,000 investment-grade U.S. bonds, providing broad diversification across various fixed-income sectors [5][9] Company Overview - Bluestem Financial Advisors has assets under management totaling $139.3 billion [4] - The current price of the Vanguard Total Bond Market ETF is $74.28, reflecting a 0.3% increase year-over-year [3][4] - The ETF has a 30-Day SEC Yield of 4.15% and a low expense ratio of 0.03%, making it a cost-efficient option for investors [7][4] Investment Strategy - The purchase of the Vanguard ETF indicates a shift towards fixed income by fiduciary firms after a volatile bond market [6] - The ETF is structured as a passively managed fund, aiming to replicate the performance of a broad investment-grade U.S. bond index [9][12] - Bonds within the ETF can help stabilize client portfolios amid ongoing uncertainties in equity markets and geopolitical issues [7][10]

Report Overview - The report is a fixed income daily market update by CMBI, covering trading desk comments, macro news, and analysis of various bonds and new issues [1][2] Trading Desk Comments - On Monday, trading flows were light due to holidays in mainland China, Taiwan, and Korea [2] - Asian institutions sold French names like BNP, ACAFP, and SOCGEN, as well as Japanese and Yankee AT1s and insurance hybrids [2] - In Greater China, ZHOSHK 28 tightened 2bps, and EHICAR 26 - 27s were unchanged to 1.1pts higher [2] - In properties, FAEACO 12.814 Perp rose 14.7pts after the coupon deferral notice deadline passed [2] - NWDEVL Perps were unchanged to 0.2pt higher, and NWDEVL 27 - 31s were 0.2pt lower to 0.3pt higher [2] - HYSAN 4.85 Perp was up 0.3pt, and VNKRLE 27 - 29s lowered 0.2 - 0.4pt [2] - FUTLAN 28/FTLNHD 26/LNGFOR 27 - 32s were 0.2pt lower to 0.2pt higher [2] - In Southeast Asia, GARUDA 31s rose 0.9pt, and VLLPM were down 0.2 - 1.0pt [2] - VEDLN 28 - 33s were unchanged to 0.1pt lower [2] - In LGFV space, TAIANH 6.9 07/16/28 and FZSZJJ 7 12/27/27 leaked 0.9 - 1.7pts [2] - This morning, flows remained light with mainland China still on holiday [3] - GARUDA 31s rose 3.1 - 3.9pts, and LASUDE 26 was 2.9pts higher [3] - CHGDNU 48/EHICAR 26 were 0.9 - 2.1pts lower [3] - VEDLN 28 - 33s were 0.1 - 0.3pt lower [3] - IHFLIN 27 - 28 were 0.5 - 0.6pt lower after Moody's placed Sammaan Capital's B2 rating on review for upgrade [3] Top Performers and Underperformers | Security | Price | Change | | --- | --- | --- | | FAEACO 12.814 PERP | 56.7 | 14.7 | | HCELEC 4.65 12/29/26 | 67.9 | 1.4 | | EHICAR 7 09/21/26 | 81.3 | 1.1 | | GARUDA 6 1/2 12/28/31 | 88.8 | 0.9 | | CFAMCI 5 1/2 04/27/47 | 98.0 | 0.8 | | CCAMCL 4 3/4 12/04/37 | 93.3 | -1.7 | | TAIANH 6.9 07/16/28 | 94.3 | -1.7 | | VLLPM 9 3/8 07/29/29 | 49.5 | -1.0 | | FZSZJJ 7 12/27/27 | 99.3 | -0.9 | | TENCNT 3.68 04/22/41 | 85.1 | -0.9 | [4] Macro News Recap - On Tuesday, S&P (-0.38%), Dow (-0.20%), and Nasdaq (-0.67%) were lower [6] - The release of US Aug'25 trade balance was delayed due to the federal government shutdown [6] - 2/5yr UST yield was lower, while 10/30yr UST yield was higher on Tuesday [6] - 2/5/10/30 yield was at 3.57%/3.71%/4.14%/4.73% [6] Desk Analyst Comments - Vedanta Resources (VRL) priced USD500mn VEDLN 9.125 10/15/32 with an orderbook of over USD1.6bn [7] - Net proceeds are for prepaying the 18% private credit facility due Apr'26 [7] - Over 14 months, VRL has raised USD3.6bn in USD bonds, smoothing its maturity profile and lowering funding costs [7] - Analysts prefer VEDLN 9.475 07/24/30 for a better risk - adjusted profile [7] - The new VEDLN 32s trade in line with VEDLN 31s at 9.0% YTW [7] - VEDLN 9.475 07/24/30 trades at 102.2 with 8.8% YTW, offering 46bps pickup over NICAU 9 09/30/30 [7] VRL's Outstanding USD Bonds | Security name | ISIN | Amt o/s (USD mn) | Ask px | YTW | Issue rating (M/S/F) | | --- | --- | --- | --- | --- | --- | | VEDLN 10.25 06/03/28 | USG9T27HAH76 | 300 | 103.7 | 7.8% | -/B/B+ | | VEDLN 10.875 09/17/29 | USG9T27HAG93 | 1,200 | 105.4 | 8.7% | -/B/- | | VEDLN 9.475 07/24/30 | USG9T27HAL88 | 550 | 102.2 | 8.8% | B2/B/- | | VEDLN 11.25 12/03/31 | USG9T27HAJ33 | 500 | 107.7 | 9.0% | -/B/B+ | | VEDLN 9.125 10/15/32 | USG9T27HAN45 | 500 | 100.3 | 9.0% | B2/-/B+ | | VEDLN 9.85 04/24/33 | USG9T27HAK06 | 550 | 102.5 | 9.1% | B2/B/- | [8] Offshore Asia New Issues Priced - Muthoot Finance (tap) issued 150mn USD, 5 - year bonds with a coupon of 101.75 and an issue rating of Ba1/BB+/- [11] Pipeline - There are no offshore Asia new issues in the pipeline today [12] News and Market Color - Onshore primary issuances are suspended during the National Day Holiday [19] - Macau logged over 1mn visitors in the first 7 days of Oct'25 Golden Week [19] - Adani Green inked a USD250mn loan from four global banks for refinancing [19] - Garuda Indonesia asked for a USD600 - 800mn injection from Danantara to maintain 51 aircraft [19] - GLP received interest from Middle East institutions for a strategic investment of about USD1bn [19] - LG Electronics India's USD1.3bn IPO sold out on the first day [19] - Canara Robeco AMC, ORIX's Indian JV, plans an IPO of INR13.3bn (about USD149.4mn) [19] - Sinopec is adding at least 169mn barrels of oil reserves [19] - San Miguel was fined for a'misstatement' in its 1H25 earnings report [19]

Core Insights - Ongoing debates among elected officials regarding the budget on Capitol Hill may lead to further interest rate cuts [1] Group 1 - The current market dynamics suggest that fixed income investors might consider repositioning their portfolios in response to potential interest rate changes [1]

Report Industry Investment Rating The document does not provide the industry investment rating. Core Viewpoints of the Report The report, as a continuation of AI - empowered bond market investment research, focuses on the current application of AI technology in the bond market and vertical large - models in the frontier fixed - income field. It details AI applications in bond investment research, such as curve construction, investment research process optimization, and structured product pricing. Future reports will cover the practical application of quantitative means in the bond market [1]. Summary by Relevant Catalogs 1. Introduction In 2025, with the popularity of DeepSeek, AI represented by large language models has evolved rapidly, changing the research and practice paradigms in the financial market. In the fixed - income and asset allocation fields, AI introduction has more challenges and value due to the large market capacity, diverse tools, and complex trading chains. Traditional fixed - income investment methods have limitations, and large - model technology can help market participants break information barriers and improve research depth and decision - making efficiency [11]. 2. Current Development Trends of Large Models In 2025, large - model development trends are "flagship - oriented, ecological, and embedded". Flagship models like GPT - 5, Claude 4, Gemini 2.0, and Llama 4 have become mature products. The ecological trend shows parallel open - source and closed - source paths. The embedded trend is reflected in models like BondGPT, which have penetrated the whole process of investment research, trading, and risk control. For the bond market, fixed - income vertical models like BondGPT Intelligence can directly embed generative AI into bond trading, promoting the shift from "human - machine separation" to "human - machine collaboration" [13][18]. 3. Application of AI Large Models in Fixed - Income Investment BlackRock Aladdin, a global leading asset management platform, has entered the "production - level implementation" stage. In investment research, it can process non - structured text information, extract key information, and generate summaries. In investment portfolio construction and rebalancing, it can generate scenario analyses and optimization tools. In trading execution, it scores and ranks bond market liquidity, improving trading efficiency. In risk control, it can detect potential risks and generate reports. The development path of BlackRock Aladdin provides a paradigm for other financial institutions, and the future Aladdin may become an AI - driven investment operating system [19][30]. 4. Vertical Large Models in Fixed - Income and Asset Allocation Fields - **BondGPT**: Driven by GPT - 4 and bond & liquidity data from LTX, it is used for pre - trading analysis of corporate bonds, including credit spread analysis and natural language queries for illiquid securities. It can assist in key pricing decisions, etc., with advantages such as instant information access, an intuitive user interface, and fast result return, and it can increase transaction file processing speed by 40% [32]. - **BondGPT+**: As an enterprise - level version of BondGPT, it allows customers to integrate local and third - party data, provides various deployment methods and API suites, and can be embedded in enterprise applications. It has functions like real - time liquidity pool analysis and automatic RFQ response, significantly improving the matching efficiency between dealers and customers [35]. 5. Implemented AI Applications in Fixed - Income and Asset Allocation Fields - **Curve Building**: It transforms discrete market quotes into continuous and interpolatable discount/forward curves. Generative AI has brought significant changes to traditional interest - rate modeling, with AI - based models showing better accuracy and adaptability than traditional methods. For example, a new deep - learning framework has 12% higher accuracy than the Nelson - Siegel model, and the error of the improved Libor model for 1 - 10 - year term interest rates is less than 0.5% [40]. - **Reshaping the Bond Investment Research Ecosystem**: Large language models and generative AI are reshaping the fixed - income investment research ecosystem. In trading, they provide natural - language interfaces and generation capabilities for bond analysis. They can summarize market data, policies, and research. For example, they can conduct sentiment analysis, generate summaries, and complete bond analysis tasks. BondGPT+ can improve trading counter - party matching efficiency by 25% [41]. - **ABS, MBS, Structured Products**: In structured product markets, AI - driven valuation frameworks can achieve automated cash - flow analysis, improve prepayment speed prediction accuracy by 10 - 20%, and reduce pricing errors of complex CMO tranches. Generative AI can simulate over 10,000 housing market scenarios, predict default rates with 89% accuracy, and help investors optimize portfolios and strategies [44][45].

Group 1 - The end of the year and tax year is approaching, creating complexities for investors in the stock market, with tax-efficient ETFs being a potential solution for tax relief and income generation [1][2] - Tax-efficient ETFs not only help with tax implications but also provide current income, which is significant in the uncertain market environment of late 2025, influenced by tariff issues, geopolitical risks, and potential inflation [2] - Active management in bond ETFs can offer advantages over passive strategies, particularly in assessing issuer quality and maintaining allocations amidst bond defaults or early calls [3][4] Group 2 - Rate cuts could create turbulence in fixed income markets, affecting tax-efficient ETFs that rely on municipal bonds, yet these bonds may still stand out due to their tax benefits [5] - The American Century Diversified Municipal Bond ETF (TAXF) charges a fee of 27 basis points and actively invests in both investment-grade and high-yield municipal bonds, providing income while lowering tax exposure [6] - TAXF has returned 1.5% over the last three months, outperforming its category averages, indicating that tax-efficient ETFs could be a strategic investment choice moving forward [6]

Group 1 - BW Energy has engaged Pareto Securities and Arctic Securities to arrange fixed income investor meetings for a potential new senior unsecured bond issue of USD 300 million with a five-year tenor [1] - The bond issue aims for general corporate purposes, and existing BWE01 bondholders will have the option to roll over their bonds into the new issue [1] - BW Group intends to subscribe USD 100 million in the new bond, including a rollover of USD 38.5 million from existing BWE01 bonds [2] Group 2 - CEO Carl Arnet plans to subscribe USD 2.5 million in the new bond, which includes a rollover of USD 2 million from his existing BWE01 bonds [2] - BW Energy is a growth exploration and production company focusing on proven offshore oil and gas reservoirs through low-risk phased developments [3] - The company holds significant interests in various offshore fields, including a 73.5% stake in the Dussafu Marine licence in Gabon and a 95% interest in the Maromba field in Brazil, with total net 2P+2C reserves and resources of 599 million barrels of oil equivalent at the start of 2025 [3]