Content and data provided by various third parties and Fidelity − Terms of Use | Help/Glossary
Research > ETFs > ETF / ETP Commentary > 

Tight Bond Spreads? Structured Credit Diversifies Your Income

BY | ETF Database
12:15 pm ET 07/23/26 | 9 VIEWS
Traditionally speaking, when investment-grade corporate bond spreads tighten, advisors and investors need to look outside the box to make sure they hit those crucial income goals. Oftentimes, high-yield bonds and structured credit can serve as alternative sources of income to fill this gap.Key Takeaways: Whenever investment-grade corporate bond spreads end up tightening, folks look for other options to amplify their yield. However, high-yield bonds face risks from the Fed and inflation down the line. Structured credit can bring in the income necessary to make sure investors meet their yield needs, while diversifying a fixed income portfolio through the structured credit market. The Guggenheim Securitized Income ETF (GISC) offers its own compelling approach to structured credit, targeting complexity premiums through active management. However, the macroeconomic environment may not be favorable for high-yield bonds in the coming months. Sticky inflation and potential rate hikes can prove to be perilous for these securities, especially given that it’s unclear how long inflation will be sticking around for.  As such, it could pay off for advisors and investors to look for additional income through alternative means. One way to do so is through gaining exposure to the structured credit markets Think of it this way: many structured credit allocations can generate yield comparable to high-yield bonds, but with lower default risks. It can also offer significant diversification, which can be a valuable boon to a balanced fixed income portfolio.  See More: How June’s CPI Report Could Reshape Fixed Income PortfoliosGISC's Take on Structured Credit ExposureOf course, not all structured credit strategies are created equal and choosing the right one is key. For this reason, the Guggenheim Securitized Income ETF (GISC) could be a good choice because it has the versality to easily fit  across a variety of different portfolio strategies.  GISC is an actively managed fund from Guggenheim Investments that looks to provide significant income through the structured credit universe. The fund’s disciplined portfolio team takes advantage of GISC’s active framework, navigating the structured credit market in search of undervalued securities. Furthermore, GISC aims to tap into complexity premiums by investing in securities that require more detailed knowledge and expertise to evaluate.  This kind of approach could help advisors and investors that are looking to build a more balanced fixed income portfolio, especially if corporate bond spreads end up tightening. With flexible active management, deep value opportunities, and the inherent benefits of the structured credit market, GISC could bring a lot to the table.  For more news, information, and analysis, visit the Fixed Income Content Hub.

More Commentary

BCSM’s Active Approach to SMID-Caps Is More Relevant Than Ever
BY | ETF Database
10:11 am ET 07/23/26 | 7 VIEWS
Crypto ETFs: A More Selective Market Emerges
BY | ETF Database
4:56 am ET 07/23/26 | 26 VIEWS
ETF of the Week: JPMorgan Core Plus Bond ETF (JCPB)
BY | ETF Database
10:20 am ET 07/23/26 | 23 VIEWS
View more Commentary

Search Commentary

Enter Keyword(s)
Filter Results

Performance data shown is past performance and is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. Yield and return will vary, therefore you have a gain or loss when you sell your shares. For standard quarterly performance, go to the fund's Snapshot page by clicking on the ETF/ETP's symbol.

ETFs may trade at a premium or discount to their NAV and are subject to the market fluctuations of their underlying investments.

For iShares ETFs, Fidelity receives compensation from the ETF sponsor and/or its affiliates in connection with an exclusive long-term marketing program that includes promotion of iShares ETFs and inclusion of iShares funds in certain FBS platforms and investment programs. Please note, this security will not be marginable for 30 days from the settlement date, at which time it will automatically become eligible for margin collateral. Additional information about the sources, amounts, and terms of compensation can be found in the ETF's prospectus and related documents. Fidelity may add or waive commissions on ETFs without prior notice. BlackRock and iShares are registered trademarks of BlackRock, Inc. and its affiliates.

FBS receives compensation from the fund's advisor or its affiliates in connection with a marketing program that includes the promotion of this security and other ETFs to customers ("Marketing Program"). The Marketing Program creates incentives for FBS to encourage the purchase of certain ETFs. Additional information about the sources, amounts, and terms of compensation is in the ETF's prospectus and related documents. Please note that this security will not be marginable for 30 days from the settlement date, at which time it will automatically become eligible for margin collateral.

News, commentary (including "Related Symbols") and events are from third-party sources unaffiliated with Fidelity. Fidelity does not endorse or adopt their content. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use.

Any data, charts and other information provided on this page are intended to help self-directed investors evaluate exchange traded products (ETPs), including, but limited to exchange traded funds (ETFs) and exchange traded notes (ETNs). Criteria and inputs entered, including the choice to make ETP comparisons, are at the sole discretion of the user and are solely for the convenience of the user. Analyst opinions, ratings and reports are provided by third-parties unaffiliated with Fidelity. All information supplied or obtained from this page is for informational purposes only and should not be considered investment advice or guidance, an offer of or a solicitation of an offer to buy or sell a particular security, or a recommendation or endorsement by Fidelity of any security or investment strategy. Fidelity does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating ETPs. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use. Determine which securities are right for you based on your investment objectives, risk tolerance, financial situation and other individual factors and re-evaluate them on a periodic basis.

Before investing in any exchange traded product, you should consider its investment objective, risks, charges and expenses. Contact Fidelity for a prospectus, offering circular or, if available, a summary prospectus containing this information. Read it carefully.