Core Insights - The fixed income market is complex and influenced by various factors such as interest rate policy, tariffs, and geopolitical tensions, making active management essential [2] - MFS Investment Management utilizes the expertise of its portfolio managers to navigate the intricacies of the fixed income market [3] Active Management Approach - MFS employs a diverse range of fixed income solutions that focus on intentional and prudent risk budgeting and allocation [4] - The firm's structured approach involves intensive communication and information sharing among specialized portfolio management, research, and trading teams [5] Investment Options - MFS offers active alternatives in fixed income, notably the MFS Active Core Plus Bond ETF (MFSB) and the MFS Active Intermediate Muni Bond ETF (MFSM) [6] - MFSB employs a primarily investment-grade bond strategy that integrates macro, bottom-up, and technical perspectives for value addition [7] - MFSM focuses on exploiting inefficiencies in municipal credit markets through active sector, quality, and security selection, benefiting from federal tax-free income and strong fundamentals [8] Cost Efficiency - Both MFSB and MFSM feature cost-effective expense ratios of 34 basis points [9]

Core Insights - The U.S. Federal Reserve's recent rate cut may prompt fixed income investors to consider actively managed strategies for portfolio positioning as 2026 approaches [1] - Active funds like MFS Active Core Plus Bond ETF (MFSB) and MFS Active Intermediate Muni Bond ETF (MFSM) can adapt their holdings based on the Fed's decisions regarding interest rates [2][3] Active Management Strategy - An actively managed strategy allows portfolio managers of MFSB and MFSM to adjust holdings according to current market conditions, regardless of the Fed's actions [3] - MFSB provides core bond exposure suitable for a standalone fixed income allocation or as a complement to existing indexed funds [4] Investment Strategies - MFSB employs an investment-grade bond strategy that integrates macro, bottom-up, and technical perspectives to enhance value through sector allocation, security selection, and duration/yield curve decisions [5] - MFSM offers a diverse range of municipal bonds, including student loan munis and general obligation bonds, which helps mitigate concentration and credit risks by focusing on investment-grade munis [6] Cost Efficiency - Both MFSB and MFSM are managed by a seasoned portfolio management team and offer cost-effective solutions with expense ratios of 34 basis points, equating to $34 per $10,000 invested [7]

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]

Core Viewpoint - The U.S. Federal Reserve's recent interest rate cut and the potential for further cuts create an opportunity for fixed income investors to seek higher yields through active management, particularly with the MFS Active Intermediate Muni Bond ETF (MFSM) [1][2][3]. Group 1: Interest Rate Environment - The CME Group FedWatch indicator predicts over a 90% chance of additional rate cuts in October and December, indicating a trend towards easing monetary policy [2]. - Federal Open Market Committee member Christopher Waller anticipates further cuts in the next three to six months, driven by incoming economic data [2]. Group 2: Investment Strategy - The downward pressure on yields from cash provides an opportunity for investors to reallocate towards intermediate maturity municipal bonds, which can offer higher income on both absolute and tax-equivalent bases [3]. - The MFS Active Intermediate Muni Bond ETF focuses on intermediate maturity municipal bonds, which are advantageous in the current interest rate environment [3]. Group 3: Benefits of Municipal Bonds - Municipal bonds offer federal tax-free income and stronger credit fundamentals compared to riskier corporate debt, making them an attractive investment option [3][4]. - The investment case for municipal bonds is supported by strong credit fundamentals and attractive yields, emphasizing the importance of active management in this fragmented asset class [4]. Group 4: Active Management Expertise - The MFS Active Intermediate Muni Bond ETF is managed by a team with extensive experience in municipal bonds, which is crucial for navigating the complexities of this market [5][6]. - MFS has been investing in municipal bonds since the 1970s, leveraging a 20-member team that includes legal experts to enhance their investment strategy [6].