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How Active ETFs Can Help You Better Navigate the Structured Credit Market

Most conventional fixed income involves issue a bond to an investor who receives payments on a set schedule until maturity. But, of course, external economic shocks can quickly alter the profitability of fixed-income investments. For example, rising interest rates can quickly erode the attractiveness of bonds priced at lower coupon rates.

Fortunately, structured credit products can help mitigate these risks with financial engineering. For instance, mortgage-backed securities (MBS) bundle home loans and other real estate debt to create collateralized bonds. These bonds typically have blended interest rates and maturities or have floating interest rates that adjust to higher-rate environments.

Let’s take a closer look at these products and how you can build exposure into your portfolio with active ETFs.

See our Active ETFs Channel to learn more about this investment vehicle and its suitability for your portfolio.

Investing in Structured Credit

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