This is an actively managed core bond ETF that invests across US dollar-denominated investment-grade bonds. It operates as a fund of funds, gaining indirect exposure to Treasuries, corporate bonds and mortgage bonds through other bond ETFs.

It suits medium- to long-term diversified investors who want broad investment-grade diversification as the bond core of their portfolio.

The ETF is managed by Northern Trust (FlexShares) using an active management approach.

The fund invests most of its net assets in US dollar-denominated investment-grade fixed-income assets. Using a fund-of-funds structure built on other bond ETFs and registered investment companies, it constructs exposure to Treasuries, corporate bonds and mortgage bonds. It is an active strategy that pursues total return and capital preservation together.

• Fund-of-funds structure that holds other bond ETFs
• Broad diversification across the investment-grade bond market

Assets under management (AUM) stand at $182.7M, and the expense ratio is 0.35% per year.

Compared with passive core bond ETFs, the management team's discretion is reflected in the portfolio, and because of its active management, the fee is somewhat higher than that of ultra-low-cost passive funds.

As with bond ETFs in general, interest rate direction directly affects the price, and short-term price volatility tends to appear when rates are shifting. Because the portfolio is centered on investment-grade bonds, credit risk exposure is relatively limited.

The core bond category sees continued fund inflows and outflows depending on demand for stable portfolio assets. Fund flows across bond ETFs also tend to move together with changes in the rate environment and risk appetite.

Its strength is broad diversification across investment-grade bonds, while the fees tied to active management and interest rate sensitivity are factors to consider.

Among the comparison candidates in the same core bond category shown in the table, IUSB is a lower-cost, broad passive bond ETF, and BNDX is an option that adds currency-hedged international bond exposure. BINC, in the same table, is an active bond ETF with a somewhat higher fee and a large share of management discretion. In addition, BND and AGG can be considered as lower-cost passive core bond ETFs that track the US aggregate bond market, and SGOV is also worth considering for those who want to lower interest rate sensitivity with short-term Treasuries.

Here are the points to check before investing in BNDC. Although it is a core bond asset, it is advisable to confirm in advance its interest rate sensitivity and duration, the fees associated with active management, and the layered costs of the fund-of-funds structure.

Interest rate direction and duration are the main drivers of short-term price swings. Even with an investment-grade focus, falling bond prices during periods of rising rates can cause short-term unrealized losses.

It is an active core bond ETF worth considering when you want broad diversification as the bond core of your portfolio. If cost is the priority, passive core bond funds such as BND and AGG are better choices, while BNDC suits those who prefer active management.