With a Federal Reserve rate cut looming, investors might have to look to riskier parts of the bond market to keep their income levels steady. Columbia Threadneedle is one of the firms that thinks the high yield sector of the bond market is an area where active management can make a difference. The firm launched two high yield ETFs on Thursday, aimed at different sections of the high yield market: the Columbia U.S. High Yield ETF and Columbia Short Duration High Yield ETF .
That's just telling us that default expectations, at least implied in the spread rate, are pretty low, when in reality our expectation is they're probably going to be somewhere in the 3% range," DeYoung said. The NJNK is a rules-based fund with an active component. The goal is to avoid the riskier "tail" of the high yield market.