Advisors prefer active management for fixed income securities


Record inflation is pushing the Federal Reserve to raise rates higher and faster than expected, leading bonds to serve not as a stabilizer for investors’ portfolios, but rather as a contributor of volatility. Recent survey data compiled by ETF Trends suggests that financial advisors are focusing on finding the right fixed income sectors to position their clients for higher volatility and expected long-term inflation. .

Active management is increasingly seen as the best option for navigating difficult bond markets. However, advisors who aren’t yet using ETFs say they aren’t because the strategy they’re looking for isn’t yet presented in an actively managed ETF.

“Many advisors who prefer active management for the fixed income portion of their portfolio use mutual funds because there are more products to consider,” says Todd Rosenbluth, head of research at ETF Trends. “However, we are seeing established asset managers bring some of their best strategies into the ETF space to meet advisors where they are.”

In 2022, advisors turned to less interest rate sensitive ETFs amid expected rate hikes. T. Rowe Price offers a range of actively managed ETFs, including three actively managed fixed income ETFs launched in September: the T. Rowe Price Total Return ETF (TOTR)the T. Rowe Price Ultra Short-Term Bond ETF (TBUX)and the T. Rowe Price QM US Bond ETF (TAGG).

T. Rowe Price has been in the investment industry for over 80 years conducting hands-on research with companies, utilizing risk management and employing a multitude of experienced portfolio managers averaging 22 years of experience .

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