Open file drawer with folders labeled “Bond Portfolio” and “ETF,” symbolizing diversified fixed-income investment strategy. Key Points Active bond funds have tended to outperform passive bond ETFs for the majority of rolling 10-year periods. PYLD and BINC are two leading active bond funds, each taking a varied, multisector approach that allows nimble adjustments based on interest rates, geopolitics, and more. Both of these funds offer dividend yields of 5.9% or better, and each has also delivered notab ...

Core Insights - The ETF industry is experiencing a historic start in 2026, particularly in fixed income, with bond ETFs attracting $56 billion in net inflows in January alone, contributing to over $105 billion for both fixed income ETFs and mutual funds [1] Group 1: Trends in Fixed Income ETFs - Nearly half of January's fixed income ETF flows were directed towards actively managed products, indicating a demand for professional expertise to navigate market volatility [1] - The PIMCO Multisector Bond Active ETF (PYLD) and iShares Flexible Income Active ETF (BINC) each attracted approximately $2 billion in new investments, representing 17% and 10% of their total assets respectively [1] Group 2: International Bonds - International bonds are gaining traction as investors seek higher real yields and currency hedges, with 64% of BINC's bond allocation in foreign bonds and about 25% of PYLD weighted internationally [1] - The Vanguard Total International Bond ETF (BNDX) has seen nearly $2 billion in inflows, reflecting a shift towards global fixed income exposure [1] Group 3: Intermediate Bonds - Intermediate bond ETFs, particularly those in the five- to ten-year range, are becoming increasingly popular as they offer a balance of yield and price appreciation potential [1] - The iShares 7-10 Year Treasury Bond ETF (IEF) is noted for providing a favorable investment scenario, while the Vanguard Intermediate-Term Corporate Bond ETF (VCIT) and Vanguard Intermediate-Term Treasury ETF (VGIT) have seen inflows of $5 billion and $3 billion respectively, marking asset growth of 7%-8% [1] Group 4: Structured Credit - The search for yield has led to increased investment in structured credit and securitized assets, with CLO ETFs experiencing sustained demand [1] - The Janus Henderson AAA CLO ETF (JAAA) has been a leader in attracting flows, while the PGIM AAA CLO ETF (PAAA) has also gained popularity in 2026 [1] Group 5: Upcoming Events - The trends in fixed income are expected to be discussed at VettaFi's upcoming Exchange Conference, focusing on alpha-generating strategies and allocation amid uncertainties [1] - The concept of "precision fixed income" is anticipated to accelerate, with investors seeking specific credit ratings and target durations [1]

Core Insights - The ETF industry continues to thrive, with $1.5 trillion in 2025 and $103 billion in new money gathered by January 21, 2026 [1] Actively Managed ETFs - Actively managed ETFs, despite being over 10% of ETF assets, captured nearly one-third of all ETF inflows in 2025 and 37% of new money in 2026 [2] - Active fixed income ETFs were particularly popular, with the PIMCO Multisector Bond Active ETF (PYLD) leading with $1.0 billion in new money [3] Thematic ETFs - Thematic ETFs saw a resurgence with $23 billion in inflows after three years of outflows, primarily driven by robotics and AI [4] - The Global X Defense Tech ETF (SHLD) attracted $685 million in early 2026, reflecting ongoing geopolitical tensions [4] - The REX Drones ETF (DRNZ) launched in late 2025, quickly reaching $55 million in assets and gaining 28% [5] Diversification Trends - The Invesco S&P 500 Equal Weight ETF (RSP) emerged as a leader in 2026, gathering $4.5 billion and outperforming mega-cap ETFs [7] - RSP had significant net outflows in 2025 but benefited from a shift towards moderately sized large-caps in 2026 [8] Sector Performance - The State Street Financial Select Sector SPDR ETF (XLF) regained favor in 2026, gathering $3.2 billion, driven by strong quarterly results from major US banks [9]

Core Insights - Fixed income ETFs had a record-breaking year in 2025, with inflows rising 45% to $437 billion from $300 billion in 2024, driven by macroeconomic uncertainties and falling interest rates [3][2] - Morningstar predicts that fixed income ETFs will continue to gain market share, potentially reaching 33% of the bond fund market by the end of 2026, as they have been gaining an average of 2% market share per year since November 2015 [4][5] - The demand for short-term bond ETFs is expected to increase as they offer competitive yields compared to traditional money market accounts, appealing to investors seeking better returns on cash [6][7] Market Trends - In 2025, nearly 150 new fixed income ETF products were launched, indicating a growing interest in active management within the fixed income space [2] - Broad-based fixed income ETFs, such as the iShares Core U.S. Aggregate Bond ETF (AGG) and the Vanguard Total Bond Market ETF (BND), attracted significant inflows, with $177 billion reported [8] - Active ETFs are gaining traction, with funds like the Eaton Vance Total Return Bond ETF (EVTR), JPMorgan Income ETF (JPIE), and PIMCO Multisector Bond Active ETF (PYLD) being highlighted for their potential to outperform traditional indices [9] Future Outlook - The fixed income ETF market is expected to remain dynamic in 2026, with continued investor interest in both broad-based and actively managed funds [10] - The current low-interest-rate environment from banks is likely to drive more investors towards short-term bond ETFs as a means of earning higher yields [7]

Core Insights - John Davi, founder and chief investment officer at Astoria Portfolio Advisors, discussed the firm's 15th annual report featuring ten ETF picks for 2026, emphasizing a constructive macro outlook driven by tax cuts, potential tariff cuts, and Federal Reserve rate cuts [1][2] Featured Portfolio Ideas - The iShares MSCI ACWI ex U.S. ETF (ACWX) is recommended for exposure to international equities, benefiting from a weaker dollar and attractive valuations, particularly in cyclical sectors like industrials and financials [3] - The PIMCO Multisector Bond Active ETF (PYLD), with over $10 billion in assets, is highlighted for its active management approach, outperforming the Aggregate Bond Index by 12% since its launch in July 2023 [4] - The SPDR Bridgewater All Weather ETF (ALLW), which has $700 million in assets, employs strategic asset allocation across four economic quadrants and operates with approximately 40% lower risk than the S&P 500 [5] - The Calamos Auto Callable Income ETF (CAIE), now over $500 million in assets, focuses on defined outcomes in a non-linear risk environment by selling low downside puts to generate yield [6] - The Bitwise 10 Crypto Index ETF (BITW) is included as a means to protect purchasing power against inflation, advocating a buy-and-hold strategy rather than tactical trading [7]