Close Close
ThinkAdvisor

Portfolio > ETFs > Bond

T. Rowe, State Street, Nuveen Launch Active ETFs

X
Your article was successfully shared with the contacts you provided.

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.

This is only the second ETF for Loomis Sayles, which is also the subadvisor for the Natixis Loomis Sayles Short Duration Income ETF.

Sue Thompson, head of SPDR Americas Distribution at State Street, said the new ETF “seeks to meet investors’ needs for both yield and diversification while providing the benefits of active risk management.”

The portfolio uses a top-down credit cycle approach supported by fundamental research to seek returns at asset class, sector and security levels and has a 0.55% expense ratio.

Nuveen Launches 2 Equity ETFs, Cuts Fees on 9 Other ETFs

Nuveen has launched two new ETFs which join an existing suite of 16 ETFs, and it has cut fees on nine passive ETFs — seven stock and two bond ETFs.

The new Nuveen ESG Dividend ETF (NUDV) tracks the firm’s ESG-enhanced custom index — the TIAA ESG USA High Dividend Yield Index — which includes quality large-cap and mid-cap stocks paying high dividend with positive environmental, social and governance (ESG) factors that have a lower carbon exposure than the MSCI USA Index. It trades on the Cboe and has a 0.25% expense ratio.

The new Nuveen Growth Opportunities ETF (NUGO) is an actively managed semi-transparent ETF that trades on the NYSE and uses the NYSE’s proxy portfolio structure, which shields the identity of the fund’s full daily portfolio holdings to reduce the risk that other traders can predict or copy its investment strategy.

The ETF invests in a high-conviction portfolio of 40-65 high-quality stocks that have the potential for attractive earnings growth, strong relative valuations, attractive cash flows and significant long-term returns. The lead portfolio manager is Karen Hiatt, who has 25 years investment industry experience and works with co-portfolio manager Terrence Kontos. The fund has a 0.55% expense ratio.

In related news, Nuveen cut the fees of seven enhanced index-tracking equity ESG ETFs by 10 basis points:

  • Nuveen ESG International Developed Markets Equity ETF (NUDM)
  • Nuveen ESG Emerging Markets Equity ETF (NUEM)
  • Nuveen ESG Large-Cap Growth ETF (NULG)
  • Nuveen ESG Large-Cap Value ETF (NULV)
  • Nuveen ESG Mid-Cap Growth ETF (NUMG)
  • Nuveen ESG Mid-Cap Value ETF (NUMV)
  • NUSC – Nuveen ESG Small-Cap ETF (NUSC)

Nuveen also reduced the fees of two index-tracking fixed income ESG ETFs: Nuveen ESG US Aggregate Bond ETF (NUBD) and the Nuveen ESG High Yield Corporate (NUHY).