Active Fixed Income

It was a positive quarter for emerging markets equities.

As the second half gets underway, we think a modest overweight to risk assets is called for.

This year, so far, the world has been riddled with geopolitical news, resonating in widespread unrest, yet seemingly yielding less impact on financial markets.

The bull market is alive and well, even amid widespread talk of the “death of U.S. exceptionalism.

After a tumultuous few months, June of 2025 saw a strong rally which took global markets to (or close to) new highs. The rally was broad-based, with international and U.S. markets all up strongly.

As the global economy navigates a complex landscape, investors are left wondering: are they right to be optimistic or are they being complacent? This article from Franklin Templeton Institute explores the signs of resilience as well as numerous risks.

Some say private credit hasn’t been tested. We disagree…and stress can sharpen the senses.

Proposed regulatory changes involving the Supplementary Leverage Ratio may have benefits for both large banks and the Treasury market.

Equity markets continued to march higher in June, seemingly unfazed by heightened Middle East tensions (which were short-lived) and the looming July 8 deadline for the administration’s pause on reciprocal tariffs.

We began the year optimistic that an environment of slowing growth, disinflation and easier monetary policy would be favorable for fixed income markets. Now at midyear, we maintain that view, while acknowledging that policy uncertainty and geopolitical risks may likely result in continued volatility.

It has been over six months since the FOMC has made a change to the Fed Funds rate. While the debate continues as to when the next cut will be, market consensus (per Bloomberg calculations) is currently for a 25 basis point cut in September.

An economy cannot subsist on services alone.

The US economy is important, but it’s not the only one in a global approach.

With the first half of 2025 in the books, it’s been a very interesting six months — emphasis on “V” because the S&P 500 saw a nice V-shaped formation following the April sell-off. As markets always reveal, interesting times call for interesting ETF trends to follow.

In recent months, markets have whipsawed amid changes in trade policy, geopolitical shocks, concerns about fiscal sustainability, challenges to central bank independence, technological advancements, and earnings surprises in both directions. Despite this, stocks and bonds in much of the world are close to where they began the year.

As direct lending matures and other private credit areas expand, active investors can apply relative value strategies across sectors – and even entire markets – to pursue enhanced outcomes.

For sophisticated investors, this technical shift marks a subtle but powerful pivot in monetary mechanics. It could create demand for Treasuries, improve market liquidity, and push yields lower at a time when the economy is slowing.

With the market roughly at the midpoint for 2025, investors and advisors are still assessing how changing macroeconomic conditions could affect their fixed income portfolio.

Chief Economist Eugenio J. Alemán discusses current economic conditions.

Thematic investing has experienced cycles of popularity over time. In less cautious market environments, investors often turn their attention to ambitious ideas — such as disruptive technologies or other transformative future trends — looking beyond traditional equity ETFs.

The United States’ tariff announcement on April 2, 2025, created significant market volatility, as the tariffs were perceived as higher, broader, and more punitive than expected, and the implementation sooner.

Market uncertainty needs a tailor-made approach to fixed income for advisors to construct the ideal portfolio for their clients. There’s an easier solution that encompasses an active management approach, various income sources, and low cost. It’s the Vanguard Multi-Sector Income Bond ETF (VGMS).

For years, Americans have lamented that rising housing prices and elevated mortgage rates have made homeownership unaffordable for too many first-time homebuyers, while prompting many homeowners to stay put rather than sell.

The Fed’s credibility rests not on never being wrong, but on being adaptive and forward-looking. Inflation has cooled, wage growth has moderated, and economic momentum is slowing. Now is the time for the Fed to focus not on headline fears, but on real-time data.

We continue to suggest an "up in quality" fixed income bias for the short run, but investors can still consider some of the riskier parts of the fixed income market in moderation.

Until recently, commercial real estate appeared poised for a long-awaited rebound. However, 2025 has revealed a new reality: Uncertainty has become structural.

Until that US government debt-crisis moment arrives, which we will get through, things will muddle along.

Today’s investment landscape, shaped by persistently above-target inflation, structurally higher debt and deficits, and reduced global dollar recycling into US financial markets, has contributed to elevated market volatility alongside historically high policy uncertainty.

Former Federal Reserve Vice Chair Richard Clarida explains where yields may be headed, as well as positioning considerations for the long-run by charting the relationship between r* and term premium.

Target-date fund glide paths can be important tools for retirement planning. Advisors should focus on assumptions, transparency, and outcomes to ensure they align with participants' needs.

TMX VettaFi has gathered industry experts and thought leaders for the Midyear Market Outlook Symposium happening June 26 at 11 a.m. ET.

While both valuation and technical factors suggest to us that the dollar may continue to weaken in the near-term, we would caution investors against reading too much concerning the US’ long-term economic stability into further dollar weakness.

Inflation's trend has been favorable this year, but a growing conflict in Iran—combined with already-imposed tariffs—might put upward pressure in prices later this year.

Doug Drabik discusses fixed income market conditions and offers insight for bond investors.

The recent decline in the dollar relative to other currencies is well within historical norms. Notably, previous declines were much larger without the “fear-mongering” from the “experts of doom.”

Portfolio Managers John Kerschner and John Lloyd and Client Portfolio Manager Steve Preikschat investigate the case for multisector bond funds as a core fixed income allocation.

When investors approach the financial markets, there’s a tendency to imagine that conditions can be judged as favorable or unfavorable based on one single measure or another. The fact is that market conditions at any moment in time are a composite of interdependent forces.

This week the news is about the Israel-Iran conflict. It’s terrifyingly real for those in the crossfire, while we who are safe naturally wonder what it means for us. As investors, we think about the economic and market effects. But are we seeing signal or noise?

Mid-2025 is approaching, and exchange traded fund demand continues its robust growth. Last year was a landmark year for the ETF industry, with industry net inflows for the first time surpassing $1 trillion and one ETF exceeding $100 billion in net inflows.

Powell & Company at the Federal Reserve sees an elevated stagflation threat. In response, they decided to do nothing.

While stocks experienced a roller-coaster ride powered by policy uncertainty, fixed income generally held up well despite the broader market turbulence. Will it be the same story in the second half? Let’s take a closer look.

Fixed-income investors concerned about tariffs and US exceptionalism may find opportunities in hedged global bonds.

On Monday, Tortoise Capital expanded its fund library with the launch of the Tortoise Energy Fund (TNGY). Formerly a mutual fund, the Tortoise Energy Fund is now an ETF available on the New York Stock Exchange.

How big data, AI and the human element can combine to better pursue consistent alpha.

CEO Ali Dibadj provides an update on the three macro drivers we believe will shape markets in the second half of 2025 and how Janus Henderson is helping clients position for a brighter investment future.

New strategies, shifting flows, and innovative technologies are driving a more dynamic and diversified marketplace in fixed income ETFs.

The overall U.S. equity market has fully recovered from its April lows, landing in an essentially flat position as of 5/31/2025. However, it’s been a wild ride for many investors.

Despite consumer fears of 1970s-style inflation, actual CPI has cooled to just 2.4%. Jeff Weniger makes the case that we may be living in a Goldilocks scenario, where price trends align with a stable and balanced economic environment.

The fund shines through as a prime option worthy of consideration among the vast alternatives present in the muni market. With their rare combination of credit quality and yield, munis are offering fixed income investors prime benefits in a still-uncertain bond environment.

Bonds hit a headwind in May as rates rose, but year to date, they have helped offset some of the volatility seen in stocks. See Table 2 for bond index returns for May 2025, Q1 2025, and YTD.