It is an actively managed core bond ETF that invests broadly in US-centered investment-grade bonds, such as Treasuries and high-quality corporate bonds. It diversifies across core bonds while using its management strategy to seek excess returns over a standard core bond benchmark.

It suits investors who want stable income and excess returns together from core bonds with active management, and who are willing to accept interest rate and credit risk.

It is an ETF run with an active management approach by SGI.

The fund diversifies broadly across US-centered investment-grade bonds, such as Treasuries and high-quality corporate bonds, while actively adjusting duration and sector weights to seek excess returns over a standard core bond index. It keeps stability by diversifying across core bonds, and uses active management to pursue additional returns.

• Active management combined with core bonds
• Pursuit of excess returns

Assets under management (AUM) stand at $285.0M, and the total expense ratio (Expense Ratio) is 1.02% per year.

The main point of comparison with index-tracking aggregate bond ETFs is the active management that adjusts duration and sector exposure.

Investment-grade bonds are driven by interest rates, credit spreads and the economy. Bond prices tend to rise when rates fall and decline when rates rise. An active core strategy can outperform the core index when its duration and sector adjustments prove right.

Fund flows into core bonds diverge depending on the rate environment, risk appetite and demand for income, and money sometimes shifts toward related products when expectations of rate cuts grow. It is also worth noting that performance varies with the interest rate and credit environment.

Core stability and the pursuit of excess returns are its strengths, while interest rate risk, credit risk and manager risk are considerations.

For exposure to an index-tracking aggregate bond portfolio, direct substitutes include IUSB, and for flexible active income, products such as BINC are also worth comparing. For multi-sector active bond exposure, products such as PYLD can be reviewed as well. The three products shown in the table, IUSB, BINC and PYLD, differ in management approach: an index-tracking aggregate bond strategy, a flexible income strategy and a multi-sector strategy, respectively. This ETF is differentiated by combining core bonds with an excess-return strategy.

Here are the points to review before investing in USDX. Core stability and the pursuit of excess returns are attractive, but interest rate risk, credit risk and manager risk should be checked in advance. It is also a good idea to compare it with index-tracking aggregate bond products and multi-sector products.

Falling bond prices from rising interest rates and a deteriorating credit environment are the main variables for short-term performance, and if duration and sector calls turn out wrong, the fund may underperform the core index. Because it is actively managed, results may vary depending on the manager's performance.

It is a suitable candidate for investors who want stable income and excess returns together from core bonds with active management. To track an index directly, consider a product such as IUSB, and for active core bond exposure, it is advisable to compare this product alongside it before choosing.