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How Active Bond ETFs Can Beat Second Half Stagflation

BY | ETF Database

8:13 am ET 08/03/26 | 23 VIEWS

Related Symbols
TAGG

Media headlines have spent much of this year focused on the big news, from the Middle East conflict to AI risk to drama at the Fed. It can be easy, then, to miss a potentially more consequential story flying under the radar. The specter of stagflation looms over the broader economy, with implications for bond portfolios. Active bond ETFs like the T. Rowe Price QM U.S. Bond ETF (TAGG ) can add critical flexibility for that scenario.Key Takeaways: TAGG charges just eight basis points (bps) for a core bond allocation. With its flexibility, it could help juice bond portfolios if stagflation impacts the bond landscape. TAGG has returned around 4% over the last year, while providing a solid 4.65% 30-day SEC standardized yield. TAGG charges just an eight bps-fee to provide an active, core bond offering for portfolios. The ETF will celebrate its fifth anniversary of operation this fall. TAGG looks to beat the Bloomberg U.S. Aggregate Bond Index, actively investing in fixed income with intermediate to long-term maturities. See more: Don’t Wait for Value Stocks to Break Out: TVAL Already Is Specifically, TAGG invests in a range of offerings from investment grade corporate and government debt to asset-backed securities and agency obligations. Its managers use quant models and fundamental research to scrutinize opportunities. Its active approach could help it address that potential second half stagflation. The ongoing conflict over the Strait of Hormuz is pushing energy costs higher. What’s more, while stagflation is not the base case for T. Rowe Price analysts, it still looms as a sufficient risk that may merit adding active flexibility.TAGG Offers Benefits of Active Bond ETFsThe strategy has taken that approach and provided a solid return over the last three- and one-year periods. Per T. Rowe Price data, the fund has returned 4.3% and 4.1%, respectively. In terms of yield, it has offered a 4.65% 30-day SEC standardized yield according to that data set, as well. Together, the fund could help replace existing core allocation options for fixed income. It can complement core holdings that take a passive approach, too, and overall help juice portfolios at a time when stagflation may loom. For more news, information, and analysis, visit our Active ETF Content Hub.

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