Lan Anh Chan: The days when ETFs were just about broad, passive market strategies? Those are behind us now. Thanks to the SEC’s 2019 rules, ETFs have become adaptable tools that support a wide range of strategies. One area that’s really taken off is active bond ETFs. Investors can now access active fixed-income managers with the added advantage of easy trading and transparency typical of ETFs. Plus, these bond ETFs often have lower fees than traditional mutual funds, which puts them in a strong position against older bond strategies.
If you’re on the hunt for something fresh in fixed income, here are three bond ETFs that have more to offer than your typical index bond fund.
3 promising bond ETFs to watch
- iShares Total Return Active ETF BRTR
- Dimension Core Bond ETF DFCF
- DoubleLine Opportunistic Core Bond ETF DBND
First up is the iShares Total Return Active ETF, ticker BRTR, which has earned a gold rating. While iShares might be known primarily for passive ETFs, they’re shifting gears into the active space. BRTR taps into BlackRock’s robust active fixed income expertise, which is quite impressive, along with their broad support systems.
Rick Rieder, a seasoned industry professional, leads the fixed income team and collaborates with lead manager Chi Chen. Although there has been some change in team members over recent years, the core PMs remain long-standing members of BlackRock’s fixed income group, so experience is certainly not in short supply.
The management team focuses on top-down sector allocations and interest rate strategies to shape the fund’s risk profile. They make good use of BlackRock’s research capabilities to spot essential market trends, and they use the Aladdin platform to manage portfolio risks effectively. Notably, this flexible approach has served the portfolio well this year, outperforming the category average and index by roughly 45 and 49 basis points, respectively, from January to August 2025. Since Rieder took the reins in 2010, the related mutual funds have consistently outperformed both benchmarks.
Next is the Dimensional Core Fixed Income ETF (DFCF), which aims to beat the market by strategically managing duration and credit risk. The strategy relies heavily on current pricing, as the managers evaluate the expected returns for each eligible bond based on market conditions. Typically, when the yield curve flattens or inverts, the focus shifts to shorter-term bonds.
The fund employs a systematic approach to credit risk, adjusting bond ratings based on market perceptions gleaned from prices, market yields, and credit default swaps. While it generally sticks to investment-grade bonds, when credit spreads widen, the strategy shifts toward lower-rated bonds, and vice-versa. From January to November 2024, allocations leaned towards BBB-rated bonds, resulting in a 71-basis point outperformance compared to the index.
Constraints on duration, industry, and issuer levels help maintain a close alignment with the Bloomberg U.S. Aggregate Bond Index. These ETFs also promote flexible trading, a significant advantage where a trader selects bonds with the lowest transaction costs from a group of similar options. With an annual fee of just 17 basis points, DFCF has outperformed both its category index and average since its inception in November 2021.
Lastly, we have the Bronze-rated DoubleLine Opportunistic Core Bond ETF, ticker DBND. Managed by the experienced duo of Jeffrey Gundlach and Jeffrey Sherman, this core-plus bond ETF benefits from their extensive sector expertise.
The ETF’s process starts with DoubleLine’s monthly asset allocation committee, which outlines key decisions regarding sector allocations and risks. From there, sector portfolio managers contribute bottom-up research to select the most promising sectors. This ETF particularly favors securitized bonds and emerging market bonds, showcasing the sector managers’ strengths. Unlike many competitors, DBND invests close to 50% in securitized debt, significantly influencing returns and leaning heavier than its peers in this area. While managers may explore various sectors, the ETF’s duration typically exceeds that of average competitors.
The results speak for themselves. Since its launch in March 2022 through August 2025, the ETF has exhibited low volatility while outperforming the category index by 57 basis points annually. A shorter duration proved beneficial in 2022, and the ETF’s effective credit risk management paid dividends in 2024.
For additional insights on Lan Anh Tran, check out these three unique bond ETFs.
