ETF Q&A: BondBloxx

Danielle Rutsky, Lead Product Manager of ETF Listings at Nasdaq, joins Tony Kelly, Co-Founder at BondBloxx, for a conversation about BondBloxx’s key initiatives for 2025.

1. What are some of the key initiatives you are currently focused on at BondBloxx?

• At BondBloxx, we are committed to bringing innovation and precision to the fixed income ETF market. We are focused on:
  • Spreading awareness and educating clients on our existing product suite, which spans target duration treasuries, high-yield credit ratings, BBBs, tax-aware strategies, and more.
  • Launching new and innovative products – we are excited to have launched the BondBloxx Private Credit CLO ETF (PCMM), the first ETF offering direct exposure to private credit.

2. You recently launched PCMM on Nasdaq. What trends are you seeing for credit ETFs?

• Fixed income ETFs have become increasingly attractive, particularly in today’s environment of elevated interest rates. With equity market performance concentrated in a few companies, many investors are diversifying their portfolios by shifting focus to credit markets, capitalizing on attractive yields. This shift is evident in the tremendous growth of credit ETFs. For instance, in 2024 alone, corporate bond and high yield ETFs attracted ~$27 billion in net new flows, a significant increase from the ~$16 billion seen in 2023*. Active managers who strategically take on credit risk are being rewarded, reflecting the continued strength in corporate credit fundamentals.
• With more advisors and institutional investors integrating ETFs into their portfolios, we also see growing demand for innovative fixed income products that align with the evolving market environment. Investors are looking for ETFs that provide granular, precise, and innovative exposures – similar to what we have seen in equity ETFs. Specific credit segment ETFs are particularly appealing as they offer the ability to target desired exposures while maintaining the liquidity, transparency, and cost-efficiency inherent with ETFs.

3. What types of use cases are you seeing investors utilize these strategies for, especially with the private credit focus?

• We see investors utilizing these strategies in several ways:
  • A strategic allocation in portfolios to seek enhanced returns and increased diversification
  • A complement to broader credit in fixed income allocations, which could include both public and private corporate bonds
  • And forms of alternative income, as more liquid sleeves.
• Private credit has been an asset class that has only been accessible to high net worth and institutional investors, who benefit from its attractive returns, low volatility and low correlations to public markets. PCMM specifically enables investors to integrate private credit exposure with the added benefits of ETF structures, including daily liquidity, transparency, and ease of use. Unlike traditional private credit vehicles like interval funds or BDCs, which limit redemptions to quarterly windows, PCMM offers a liquid and flexible solution. For investors previously unable to access private credit, this ETF provides an entry point to a historically exclusive asset class.

4. What's next for BondBloxx over the next 12 months?

• Looking ahead, we remain focused on serving all of our clients by working closely with advisors and institutional investors to help them achieve better outcomes for their own clients. By providing clarity and education around our precision fixed-income ETFs, including private credit, we aim to empower our clients to effectively navigate today’s dynamic market environment.
• As part of this commitment, we continue to design innovative products that address the evolving needs of our clients. Our recent filings in December 2024 reflect this commitment:
  • BondBloxx Private Credit Trust, which seeks to provide attractive risk-adjusted returns from a diversified portfolio of consumer and small business private credit assets.
  • BondBloxx IR+M Tax-Aware Intermediate Duration ETF, which seeks to deliver attractive after-tax income from a diversified portfolio of municipal bonds and taxable intermediate duration fixed income securities.

*Source: Morningstar, as of 12/31/2024.

Investors should consider the investment objectives, risks, charges and expenses carefully before investing. Read the prospectus carefully before investing, prospectus, which may be obtained by visiting this link.

There are risks associated with investing, including possible loss of principal. Fixed income investments are subject to interest rate risk; their value will normally decline as interest rates rise. Fixed income investments are also subject to credit risk, the risk that the issuer of a bond will fail to pay interest and principal in a timely manner, or that negative perceptions of the issuer’s ability to make such payments will cause the price of that bond to decline. Investing in mortgage- and asset-backed securities involves interest rate, credit, valuation, extension and liquidity risks and the risk that payments on the underlying assets are delayed, prepaid, subordinated or defaulted on.

Distributor: Foreside Fund Services, LLC.