Investors are continuing to use fixed income to provide good portfolio results. BondBloxx analysis reported that most fixed income sectors saw positive returns in March. The research attributes that the economic climate is supporting bond investing at the time.
“Economic data continued to confirm fundamental U.S. economic stability, as evidenced by employment and wage growth. Meanwhile, inflation numbers continued their uneven path downward, often confounding market desires for near-term rate cuts,” BondBloxx added.
When considering bond ETFs as a portfolio addition, investors may want to consider the BondBloxx IR+M Tax-Aware Short Duration ETF (TAXX). The fund applies an actively managed approach in order to accrue after-tax income.
See More: BondBloxx Fixed Income March 2024 Update
TAXX operates with a net expense ratio of 0.35%. The majority of the fund’s assets are invested either directly or indirectly into investment-grade fixed income options. Should the circumstances allow for it, the ETF invests at least half of its total assets into municipal options that provide income exempt from federal income taxes. It also invests in taxable bonds with the intent of providing attractive after-tax income.
As an actively managed fund, TAXX can offer maneuverability to better weigh and position investments for potential tax-aware gain. This strategy can provide relief during periods of economic uncertainty down the line, such as rate cuts.
To assist with active portfolio management, BondBloxx uses Income Research + Management (IR+M) as a subadviser. The firm has documented expertise in tax-aware strategies and active management within the fixed income sphere.
“TAXX is a differentiated ETF that tactically offers exposure to both taxable and tax-free municipal bonds based on relative attractiveness. We have seen growing demand for active fixed income ETFs in 2024,” VettaFi Head of Research Todd Rosenbluth added.
Having launched just over a month ago, TAXX’s unique strategy is already showing investor interest. Since the fund launched on March 14, 2024, it has seen over $36 million in net flows.
For more news, information, and strategy, visit the Institutional Income Strategies Channel.