ALPS Smith Core Plus Bond ETF

SMTH

Market cap $2.38B

Investors relying on passive bond index funds may find their portfolios too rigid to handle 2026's uncertain interest rate environment, according to Morningstar's latest 2026 market outlook.

Biotech and natural resources funds led the ALPS ETFs lineup in 2025, with both strategies delivering returns above 45%, according to ETF Database. The ALPS Medical Breakthroughs ETF (SBIO) gained just over 57% through December 23, topping all ALPS products for the year, according to ETF Database.

Biotech and natural resources funds led the ALPS ETFs lineup in 2025, with both strategies delivering returns above 45%, according to ETF Database. The ALPS Medical Breakthroughs ETF (SBIO) gained just over 57% through December 23, topping all ALPS products for the year, according to ETF Database.

An actively managed bond fund from SS&C ALPS Advisors has attracted close to $1 billion in net inflows over the past year as investors position portfolios for an environment where security selection could provide an advantage over passive index tracking.

The marriage of active management and fixed income ETFs is garnering increasing attention. Rightfully so: the bond ETF wrapper is seen as breathing new life (and assets) into actively managed products.

The central question facing investors heading into 2026 is whether market performance will finally extend beyond the handful of megacap technology companies that have dominated returns for the past three years.

Actively managed ETFs, particularly those of the fixed income variety, are among the fastest-growing ETF segments today. That growth has been facilitated in part by advisors moving away from higher-fee mutual funds and issuers converting popular mutual funds to the ETF wrapper, among other factors.

The rise of active ETFs has slowly but surely changed the investing landscape. Investors can get access to flexible strategies that can adapt to circumstances and often outperform passive peers.

ETFs have facilitated an active management renaissance. Nowhere is that more apparent than in the fixed income arena.

What does the future hold for fixed income? 2025 has offered some very unique factors to consider with the Federal Reserve pressured to cut rates.