SMTH ETF

Making moves with your fixed income allocation? As investors reshuffle their portfolios, many may be looking to tax-loss harvest into ETFs.

The ALPS Smith Core Plus Bond ETF aims for above-average total return through current income and capital appreciation, investing primarily in bonds. SMTH has $968m in AUM, charges 59bps in fees, and offers a forward yield of around 4.3%, with all payouts from income. Compared to the iShares Core U.S. Aggregate Bond ETF, SMTH has higher fees but offers a higher yield and active management.

It's widely expected that the Federal Reserve will cut interest rates next month, perhaps by as much as 50 basis points. That would potentially provide a much needed positive jolt to bonds and fixed income ETFs.

Many investors are very familiar now with the rise of active ETFs. Active strategies have made a big leap forward over the last few years, taking in significant flows relative to their smaller AUM as a segment of ETFs as a category.

The Federal Reserve reiterated forthcoming rate cuts as the central bank paused on any loosening of monetary policy just yet. This allows fixed income investors to take advantage of flexible bond funds now as Treasury yields dip further.

Investors have shown renewed bond interest in 2024. They're looking to capture yield at the current rates before the U.S. Federal Reserve starts loosening monetary policy.

The anticipation of interest rate cuts is causing investors to scramble for bond yields now before monetary policy loosens. Fortunately, this demand has been met by record issuance in the beginning of this year.

SS&C ALPS Advisors recently launched an active core bond ETF that is worth consideration as investors look for ways to beat the market in a complex economic environment. Active core bond ETFs have seen outsized flows and attention in recent history as investors navigate uncertainty around interest rates.

Looking to add an active core bond ETF to your portfolio? There's still plenty of time to add to or alter a fixed income allocation to start 2024.