On Monday, The TCW Group continued to expand its ETF library with the firm’s third mutual fund to ETF conversion. With the conversion complete, the MetWest Flexible Income Fund (MWFEX) has been converted into the TCW Flexible Income ETF (FLXR).
Designed for income-seeking investors, FLXR aims to generate strong current income along with long-term capital appreciation. FLXR is an actively managed fund with a net expense ratio of 0.40%.
“Over the past half-century, TCW has built a leading fixed income business committed to delivering sustained returns for clients, backed by our experienced portfolio management team,” noted Bryan Whalen, TCW chief investment officer and generalist portfolio manager for TCW’s Fixed Income group. “This conversion marks a natural next step, delivering our strong track record in an easy-to-access ETF.”
Sector Diversification
FLXR invests in fixed income options across a wide variety of sectors. This includes instruments of different maturity profiles and credit quality. FLXR may invest in high-yield bonds, but no more than 65% of its total assets may be in assets with a credit quality below investment grade.
Along with U.S.-issued instruments, FLXR may invest in fixed income options issued by foreign government and corporations, including emerging markets. Up to half of the fund’s total assets may be allocated to emerging markets and instruments tied to emerging market countries.
While junk bonds and emerging markets present risk, active management can help safely navigate the bond space. When managing portfolio risk, the fund prospectus notes that FLXR considers a wide variety of factors. These include market sector performance, liquidity, the yield curve, and current monetary and fiscal policy, among others.
“This conversion comes as the markets navigate much stickier inflation than expected and as rates will likely remain elevated into the latter half of the year. Advisors are looking for more and more ways to generate consistent income with nimbler, more flexible tools,” noted Kirsten Chang, VettaFi senior industry analyst.
The TCW Group currently has six ETFs listed in the United States. In total, these funds account for over $1 billion in assets under management.
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