Fixed-income ETFs (exchange-traded funds) can be a valuable addition to an investment portfolio due to their ability to provide diversification, consistent income, and lower risk compared to equities. These ETFs offer exposure to multiple fixed-income securities, which reduces the potential impact of a single security’s default. Today, we have shortlisted two such ETFs – Aptus Defined Risk ETF (DRSK) and Simplify Interest Rate Hedge ETF (PFIX) – that provide exposure to fixed-income securities, ensuring steady returns.
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Let’s take a deeper look at these two ETFs.
Aptus Defined Risk ETF
DRSK is an actively managed ETF that aims to provide regular income and capital appreciation. This ETF uses a hybrid strategy, investing about 90-95% of its assets in investment-grade corporate bonds and the remaining in long-term in-the-money call options on large-cap stocks.
The ETF was founded in July 2018 and has a low expense ratio of 0.78%. As of date, the ETF has an AUM (assets under management) of 1.03 billion. Year-to-date, DRSK ETF has generated returns of about 15%.
Simplify Interest Rate Hedge ETF
PFIX aims to provide investors protection from potential losses due to rising long-term interest rates. The ETF typically invests in over-the-counter (OTC) interest rate options, which are not accessible to individual investors.
The PFIX ETF was founded in October 2021 and carries an expense ratio of 0.5%. As of date, the ETF has an AUM of $156.53 million. Year-to-date, PFIX ETF has returned nearly 14%.
Concluding Thoughts
ETFs are a low-cost, diversified, and transparent way to participate in the market. Investors looking for potential recommendations could consider DRSK and PFIX ETFs to gain exposure to the fixed-income market.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
