Important Gauge
While the bulk of this year’s active inflows have been delivered to systematic or outcome-oriented strategies, several traditional bond- and stock-picking ETFs debuted this year. In May, Rick Rieder, BlackRock Inc.’s chief investment officer of global fixed income, unveiled the BlackRock Flexible Income ETF (BINC), followed by Pacific Investment Management Co. Chief Investment Officer Dan Ivascyn’s PIMCO Multisector Bond Active ETF (PYLD) a month later.
Both bond funds have outperformed the Bloomberg Aggregate Bond Index since inception, despite a challenging backdrop for fixed income amid the Federal Reserve’s interest rate-hiking campaign. Their success—or failure—will be an important barometer of demand for old-school active, said Morningstar Inc.’s Ben Johnson.
“This year, we’ve seen some real marquee names come to market in the ETF wrapper for the first time. What’s going to be the future trajectory of flows for those funds?” said Johnson, the firm’s head of client solutions. “Funds like those will be the real litmus test for the prospects for what people would more conventionally identify as active packaged in the wrapper.”
This article was provided by Bloomberg News.