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Adaptability Will Be Crucial in Fixed Income in 2026

BY | ETF Database
4:40 am ET 11/20/25 | 24 VIEWS
Broadly speaking, fixed income ETFs, including the Neuberger Berman Total Return Bond ETF (NBTR ) and the Neuberger Berman Short Duration Income ETF (NBSD B), have been decent performers this year. But smart investors will remember that what happened in one year isn’t guaranteed to repeat when the calendar turns.One way of interpreting that sentiment is that fixed income investors need to be agile and nimble in 2026. These objectives can be accomplished with the actively managed Neuberger Berman ETFs mentioned above. Flexibility could well be the name of the fixed income game in the new year. That’s particularly so with Federal Reserve policy in flux. “The depth and speed of future interest rate cuts remains in question. Inflation is proving more stubborn than anticipated in many [economies. And] US tariff policies could push prices higher in 2026,” according to BNP Paribas. “We may be entering a new era of structurally higher [inflation. That means] interest rates may not fall as far in the current cycle as many hope. This, combined with a weaker outlook for economic growth, puts central banks in a difficult position.”Be Active, Adaptable With NBSD, NBTRThe prevailing wisdom indicates the Fed is unlikely to lower rates next month. But there’s also emerging sentiment that Chair Powell could be out of a job at some point in the first half of 2026. If that departure materializes, his replacement is likely to give the White House what it wants: lower rates. That could spell opportunity with ETFs such as NBSD and NBTR. But it’s not guaranteed that scenario comes to pass. However, the Neuberger Berman ETFs could prove useful to advisors and fixed income investors in the new year. ["Fixed income has become much more attractive now that yields have risen from their ultra-low levels of five years ago. But] the outlook is far from straightforward. But as we move into 2026, what is more certain is that a flexible, diversified and dynamic investment approach to bond investing will be key,” added BNP Paribas. The rigid, passive fixed income funds of yesteryear may not be the top avenues for bond success in 2026. NBSD and NBTR can fill that void, potentially doing so with better outcomes. “Higher volatility has widened the gap between the best- and worst-performing areas of the fixed income universe. In today’s shifting and uncertain economic landscape, something which will no doubt spill into 2026, a global, flexible approach will be as essential as it ever has been,” concluded BNP Paribas. For more news, information, and analysis, visit the Innovative ETFs Content Hub.

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