QUICK SPARK: Looking Beyond Treasuries? New ETF Adds High-Yield Debt, Emerging Markets and CLOs

BondBloxx has launched a new exchange-traded fund designed to offer investors broader fixed-income exposure.

The BondBloxx Core Plus ETF (NYSE:BBLX)tracks the J.P. Morgan GABI USD Liquid Plus Index, covering U.S. Treasuries, investment-grade and high-yield corporate bonds, mortgage-backed securities, emerging markets debt and collateralized loan obligations (CLOs).

The fund aims to go beyond traditional U.S. aggregate bond benchmarks by incorporating higher-yielding segments of the fixed-income market. SEI collaborated with BondBloxx on the product, bringing an asset allocation and portfolio construction perspective.

This fund has an expense ratio of 0.22%.

QUICK CONTEXT: Core Bond Investing Gets a Wider Net

Traditional core bond funds often track the Bloomberg U.S. Aggregate Bond Index, providing exposure primarily to investment-grade U.S. bonds, including Treasuries, corporate debt and mortgage-backed securities.

However, this approach excludes several segments of the broader fixed-income market, including high-yield corporate bonds, emerging market debt, and collateralized loan obligations (CLOs).

Core-plus strategies seek to address this gap by combining traditional investment-grade holdings with additional fixed-income sectors that can offer higher yields and different sources of returns. The trade-off is that these additional exposures can introduce greater credit risk, liquidity risk and sensitivity to changing economic conditions.

BBLX aims to bring these exposures together in an index-based ETF, offering investors a broader bond allocation without relying on a traditional actively managed core-plus strategy. Its performance will depend on the underlying bond markets and the risks associated with its expanded investment universe.

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