ETFs are heading for another record year of inflows. Fixed income funds are playing significant parts in that influx of capital. Taking things a step further, actively managed bond ETFs are garnering considerable attention (and assets) from advisors and investors.
Plenty of ETF industry experts and market observers believe the move to active fixed income ETFs will be durable over the long term, indicating products such as the Neuberger Berman Total Return Bond ETF (NBTR) and the Neuberger Berman Short Duration Income ETF (NBSD) could be in for growth spurts.
“Hundreds of billions of dollars have poured into bond ETFs in the first nine months of 2025. And more of these strategies have hit the market over the past several years. It’s important to remember that some bond ETFs are riskier than others,” noted Morningstar.
Indeed, active ETFs such as NBSD and NBTR can mitigate risk in nimble fashion. That trait is all the more relevant at a time when the Federal Reserve’s interest rate policies are in flux.
NBSD, NBTR Breathing Fresh Life Into Bond ETFs
Murkiness regarding the Fed’s willingness or unwillingness to lower rates in December is one reason advisors may want to examine active fixed income ETFs — including NBSD and NBTR — but the Neuberger Berman funds could find expanding audiences for other reasons.
Those include the notion that as the ETF industry matures, innovation is increasingly important. Some experts argue that’s hard to come by on the equities side. That indicates bond funds such as NBSD and NBTR could command more attention as asset allocators look for better ways to access bonds. That asset class has long been dominated by passive aggregate structures.
“A lot of stock ETFs are just really picked over. We’ve seen kind of everything. We’ve seen indexes, strategic beta, thematics, ESG, all that type of stuff. It’s all out there,” said Morningstar’s Daniel Sotiroff. “It’s pretty saturated, and a lot of the stuff is already competing on price. So, when you look at the new areas that you can actually go into and maybe compete in or get a first-mover advantage, I think it’s going to be more on fixed income and the bond market.”
NBSD has other advantages, including an established track record across a variety of interest rate environments. While both NBSD and NBTR are relatively new in ETF form, the former was established as a mutual fund in 1986 before converting to the ETF wrapper in June 2024.
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