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Beyond the Boring: Exciting New Active Fixed Income ETFs

BY | ETF Database
07/21/2025 | 147 VIEWS
Approximately 500 new ETFs launched year-to-date through mid July, according to FactSet. This is significantly more than the approximately 300 at this point a year earlier. Some of these new ETFs incorporate options to enhance the income or reduce the downside risks of an equity strategy. Others provide leveraged equity exposure. In particular, there are numerous active fixed income ETFs that have come to market. This growing supply excites me. During a June educational virtual event hosted by VettaFi, 51% of respondents said they expected their allocation to active ETFs to increase in the next 12 months. Here are a few new active fixed income ETFs that caught my attention.Vanguard Goes Beyond the CoreThe Vanguard Multi-Sector Income Bond ETF (VGMS) launched in June 2025. VGMS is part of Vanguard’s recent active ETF buildout that included late 2024 launches of the Vanguard Core Bond ETF (VCRB A) and the Vanguard Core Plus Bond ETF (VPLS).  While VCRB and VPLS each have less than 10% of assets in high-yield bonds, VGMS has more than 50% in speculatively rated securities. In exchange, VGMS’s 30-day SEC yield of 5.5% is higher than its active fixed income Vanguard siblings.  High Yield vs. High Quality for Muni InvestorsAt VettaFi’s Midyear Market Outlook Symposium in late June, many advisors shared that they found municipal bond strategies particularly appealing. A pair of active muni bond ETFs may interest them. The Macquarie National High-Yield Municipal Bond ETF (HTAX) is the older of the two, having launched in March 2025. HTAX has a similar management team and investment approach as the separately run Macquarie National High-Yield Municipal Bond Fund (CXHYX), a Morningstar four-star rated strategy with $3.3 billion across share classes.  HTAX recently had 42% of assets in non-rated bonds and an additional 17% in speculative-grade bonds. However, the remainder of the portfolio was high-quality municipal bonds.   Meanwhile, the Genter Capital Municipal Quality Intermediate ETF (GENM ) launched in May 2025. While relatively new to the ETF market, Genter has a long record of success as an active fixed income manager. The firm has offered a separately managed account (SMA) with the same name as GENM since 1991.  The $1 billion SMA strategy outperformed the Bloomberg Municipal Bond benchmark by 30 basis points in the 10-year period ended March 2025.  Unlike HTAX, all of GENM’s assets were investment-grade rated. A Twist on CLOsOur last new active fixed income ETF launched in July. The Reckoner Leveraged AAA CLO ETF (RAAA) offers a twist on a popular ETF trend. Demand for actively managed CLO ETFs has accelerated as investors sought exposure to less rate sensitive securities with attractive income.  Reckoner Capital is new to the ETF industry, but managed over $16 billion in alternative credit strategies for institutional investors. Relative to other CLO ETFs from Janus Henderson, Eldridge and others, RAAA could generate higher yields by borrowing through short-term repurchase agreements. There are six actively managed fixed income ETFs with $10 billion. While it is still early days for many other products, we expect industry wide demand to accelerate. As advisors and clients learn about these new fixed income products, they could gain traction. For more news, information, and analysis, visit VettaFi | ETFDB.

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