This is an actively managed bond ETF that does not track a specific index. It follows a core plus strategy centered on investment-grade bonds, with additional exposure to high-yield and non-US bonds, and aims to maximize total return over the medium to long term.

It suits medium- to long-term investors who want diversification across the broader bond market while seeking excess returns relative to passive funds.

It is an actively managed ETF launched in 2017 by First Trust.

While staying close to the duration level of the Bloomberg US Aggregate Index, the fund adjusts its sector and credit-rating allocations to suit market conditions. It also holds below-investment-grade and non-US bonds up to a set percentage of net assets in order to enhance yield.

• Discretionary credit and duration adjustments, not tied to any specific index
• A core plus approach that crosses the line between investment-grade and high-yield

Assets under management (AUM) stand at $2.8B, and the expense ratio is 0.65% per year.

Its fees are on the higher side compared with similar core bond ETFs such as BNDX and IUSB, but it seeks to differentiate itself through the flexibility of active management.

Returns respond sensitively to shifts in the interest rate cycle. In periods of stable rates, the fund has tended to deliver steady interest income driven mainly by investment-grade bonds. Whether the high-yield weighting is adjusted is a key variable behind short-term performance differences.

Inflows into active bond ETFs tend to rise when interest rate uncertainty is high, and FIXD likewise shows a pattern of stronger inflows when interest in core plus strategies increases.

Discretionary credit and duration management is its strength, while the fee burden and reliance on manager performance, both inherent to active management, are its weaknesses.

BNDX, shown in the table, is a passive ETF focused on non-US investment-grade bonds, while IUSB broadly tracks the entire US bond market. BINC, PYLD, and JCPB are active bond ETFs managed by BlackRock, PIMCO, and JPMorgan, respectively, and take a core plus approach similar to FIXD, though the managers and credit allocations differ. In addition, investors may also consider BOND (PIMCO's active ETF) from the same core plus category, or LQD if they want a pure investment-grade comparison.

Here are the points to verify before investing in FIXD. Because it is an active bond ETF, it is important to thoroughly understand its fee level, management philosophy, and credit allocation in advance.

In a rising-rate environment, falling bond prices can offset interest income, and the higher the high-yield weighting, the greater the potential for losses from wider credit spreads. There is also the risk that, given its active management, performance may fall short of expectations.

This ETF is worth considering for investors who want to add a yield boost to a core bond position. Because its fees are higher than those of passive bond ETFs, it is wise to calculate in advance how they will affect net returns over a long holding period.