What You Need to Know
- The boom in actively managed bond ETF launches is continuing into the fourth quarter.
- T. Rowe Price's new bond ETFs are its first fixed income ETFs.
- The SPDR Loomis Sayles Opportunistic Bond ETF is only the second ETF for Loomis Sayles.
The boom in actively managed bond ETF launches is continuing into the fourth quarter.
In the last week alone, T. Rowe Price and State Street Global Advisors in partnership with Loomis Sayles launched actively managed ETFs after Harbor Capital did the same the week before. Nuveen, meanwhile, launched two actively managed equity ETFs last week and reduced fees on nine passive ETFs — seven equity and two fixed income ETFs.
T. Rowe Price Introduces Its First Fixed Income ETFs
The three new T. Rowe Price fixed income ETFs are the fund company’s first fixed income ETFs and all are actively managed by the same investment team that manages similar fixed income mutual funds. All funds are being sold as core portfolios and are fully transparent, disclosing their holdings on a daily basis. They trade on the New York Stock Exchange.
The T. Rowe Price QM U.S. Bond ETF seeks to outperform the U.S. investment-grade bond market on a total return basis, has a 0.08% expense ratio and is managed by Robert Larkins, who has 18 years of investment experience.
The T. Rowe Price Total Return ETF (TOTR) wants to maximize total return through income and capital appreciation across market cycles, and a net expense ratio of 0.31%. It’s co-managed by Chris Brown, who has 21 years of investment experience, and Anna Dreyer, with 12 years of investment experience.
The T. Rowe Price Ultra Short-Term Bond ETF (TBUX) seeks a high level of income consistent with low volatility of principal value, using a broadly diversified portfolio composed of shorter term government, investment-grade corporate, and securitized bonds. It has a net expense ratio of 0.17% and is managed by Alex Obaza, who has 16 years of investment experience.
“We’re pleased to continue to grow our ETF capabilities now across both the equity and fixed income asset classes with strategies that have demonstrated success and strong client interest,” said Tim Coyne, head of Exchange-Traded Funds at T. Rowe Price, which had $1.68 trillion in assets under management as of Aug. 31.
State Street Partners Partners With Loomis Sayles on New Bond ETF
State Street Global Advisors has launched the SPDR Loomis Sayles Opportunistic Bond ETF (OBND), an actively managed fund that invests in investment-grade, high-yield and non-dollar-denominated debt as well as leveraged loans and securitized issues. Loomis Sayles, an affiliate of Natixis Investment Managers, is the fund’s subadvisor.