Pacific Global Asset Management has launched two new actively managed ETFs in the US. Sub-advised by affiliate Cadence Capital Management, the funds offer income solutions by investing in high-yield bonds globally as well as international dividend-paying companies.

Pacer ETFs has launched its first ‘Trendpilot’ bond product. The new Pacer Trendpilot US Bond ETF (PTBD US), which has listed on NYSE Arca, invests in US high-yield bonds when the outlook is perceived to be positive and allocates part or all of its capital Treasuries when the outlook is thought to be less favourable. Sean O’Hara, President of Pacer ETFs, commented, “Our new Trendpilot bond ETF gives investors exposure to potentially higher yielding fixed income assets that complement a portfolio, but with the added benefit of a risk management strategy.”

Invesco’s contingent convertible bond ETF, the Invesco AT1 Capital Bond UCITS ETF, has surpassed $500 million in assets under management. The milestone was reached on Tuesday, sixteen months after the fund’s inception on the London Stock Exchange in June last year. Jim Goldie, Head of EMEA ETF Capital Markets, Invesco, commented, “The growth of our AT1 ETF is a great example of how investors are using the wrapper to obtain exposure to segments of the fixed income market that they may not be able to access directly.”

By Karen Schenone, Fixed Income Product Strategist, BlackRock.

Economic uncertainty has increased investor focus on the possibility of BBB-rated bonds being downgraded to junk. Investors should weigh this risk with their search for yield.

State Street Global Advisors (SSGA) has made changes to the $900 million SPDR Nuveen S&P High Yield Municipal Bond ETF (HYMB US) which sees the fund ditch index provider S&P Dow Jones Indices in favour of Bloomberg. Effective 1 October 2019, the ETF has ceased tracking the S&P Municipal Yield Index and begun following the Bloomberg Barclays Municipal Yield Index.

Nuveen, an operating division of TIAA Global Asset Management, has launched a new fixed income ETF – the Nuveen ESG High Yield Corporate Bond ETF (NUHY US) – on NYSE Arca. The fund is an industry-first in that it is currently the only US-listed ETF to provide exposure to high yield corporate bonds while factoring in environmental, social, and governance (ESG) considerations. Jordan Farris, Managing Director and Head of ETFs at Nuveen, commented, “The Nuveen ESG High Yield Corporate Bond ETF seeks the dual objectives of offering investors competitive income while remaining consistent with environmental, social, and governance values.”

Professional investors are expected to increase their allocations to fixed income over the next three years and within those allocations boost their exposure to ETFs, according to research commissioned by Tabula Investment Management. The research also uncovered an appetite for new product development within fixed income ETFs with more than half of investors keen to see the sort of smart beta innovation exhibited in equity markets replicated in the fixed income space.

Tabula Investment Management’s credit volatility premia ETF – the Tabula J.P. Morgan Global Credit Volatility Premium Index UCITS ETF – has surpassed €150m in assets under management, less than six months since its launch. The fund, which debuted on the London Stock Exchange in March, captures the difference between realized and implied volatility in North American and European high yield credit default swap markets. Michael John Lytle, CEO of Tabula, commented, “Our ETFs have struck a chord with many types of investors, from wealth managers and asset managers to banks and insurance companies.”

By James Kim, Director, ETFs at VanEck.

With the prospect of better returns from higher-yielding US debt for the rest of the year, we believe a long position in VanEck Vectors Fallen Angel High Yield Bond ETF (ANGL US) is worth considering.

European fixed income specialist Tabula Investment Management has listed the Tabula JP Morgan Global Credit Volatility Premium Index UCITS ETF (TAB2 GR) on Deutsche Börse’s Xetra platform. The ETF captures the difference between realized and implied volatility in credit default swap index options markets. Michael John Lytle, CEO of Tabula Investment Management, commented, “There is a growing need for more innovative fixed income tools to manage risk and navigate markets, and we are excited to be able to offer this product to German investors.”