Rieger Report®: Bond ETF Performance: Active v. Passive?

Bond ETF Performance: Active or Passive?

This is supposed to be the year of the active bond manager, but the year-to-date data, at least for ETFs does not show the value of active management despite the ads by major fund companies!

Broad Bond ETFs:

  • First Trust TCW Opportunistic Fixed Income ETF (FIXD), an actively managed fund, has led the pack but is the other actively managed ETFs have not outpaced passively managed ETFs.
  • The SPDR DoubleLine Total Return Tactical ETF (TOTL), iShares Yield Optimized Bond ETF (BYLD) and the First Trust TCW Unconstrained Bond ETF (UCON) are performing well below the passively managed ETFs.

Municipal Bond ETFs:

  • The iShares Municipal Bond ETF (MUB) and Vanguard’s (VTEB) are outpacing actively managed ETFs.
  • Skewing the actively managed ETFs is the relatively poor performance of American Century’s (TAXF) and First Trust’s (FMB) where both are significantly lagging behind passive ETFs.

Mortgage Backed Securities ETFs:

  • Actively managed v. passively managed ETFs in this sector seem to be neck and neck from a performance perspective currently.

Sources: Yahoo.com and ETFAction.com. Table is provided for illustrative purposes only.  Past performance is not a guarantee of future results. Not all ETFs or asset classes represented here. FactSet classifications are used.  Data as 7/6/2020.

Broad Bond ETFs % NAV Return

RiegerReport_070720_1

Sources: Yahoo.com and ETFAction.com. Table is provided for illustrative purposes only.  Past performance is not a guarantee of future results. Not all ETFs or asset classes represented here. FactSet classifications are used.  Data as 7/6/2020.

Investment Grade Municipal Bond ETFs % NAV Return

RiegerReport_070720_2

Sources: Yahoo.com and ETFAction.com. Table is provided for illustrative purposes only.  Past performance is not a guarantee of future results. Not all ETFs or asset classes represented here. FactSet classifications are used.  Data as 7/6/2020.

Intermediate Term Municipal Bond ETFs % NAV Return

RiegerReport_070720_3

Sources: Yahoo.com and ETFAction.com. Table is provided for illustrative purposes only.  Past performance is not a guarantee of future results. Not all ETFs or asset classes represented here. FactSet classifications are used.  Data as 7/6/2020.

Mortgage Backed Bond ETFs

RiegerReport_070720_4

Sources: Yahoo.com and ETFAction.com. Table is provided for illustrative purposes only.  Past performance is not a guarantee of future results. Not all ETFs or asset classes represented here. FactSet classifications are used.  Data as 7/6/2020.

Data Resources Used in this Report

Analyst Disclosures

  • At the time of this writing, JR Rieger’s fixed income related holdings include investment grade individual municipal bonds, insured municipal bonds, a municipal bond money market fund and a position in the VanEck Vectors High-Yield Municipal Index ETF (HYD).

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Rebalance for Q1 2020.