Vanguard Multi-Sector Income Bond ETF

VGMS

Market cap $126M

Indexed ETFs can provide an easy, cost-effective alternative for fixed income exposure that draws from myriad sources. However, investors could be missing out on the advantages associated with active management.

The same macro factors affecting the equities market, such as tariffs, geopolitical factors, and a changing interest rate policy are also affecting the fixed income markets. With that, there's never been a better time to access active fixed income strategies that help advisors and investors navigate the murky macro environment.

The Vanguard Multi-Sector Income Bond ETF (VGMS) offers actively managed, diversified exposure to both high yield and investment grade bonds with a short duration profile. VGMS is overweight corporate bonds, aiming for higher yields while maintaining risk control through active management. Given historically tight credit spreads, a dollar cost averaging (DCA) approach is recommended to smooth entry points and manage risk.

Vanguard continues its push into the active ETF market with the introduction of three news funds focused on equities. These are the Vanguard Wellington U.S. Value Active ETF (VUSV), Vanguard Wellington U.S. Growth Active ETF (VUSG), and Vanguard Wellington Dividend Growth Active ETF (VDIG).

When it comes to inflows this year, Vanguard continues to prove it's in a league of its own. The ETF juggernaut has amassed $315.9 billion in inflows as of November 11, which is 30% higher compared to the same time a year ago.

Advisors may sometimes feel like they're venturing out to solve the world's personal financial problems alone. This applies to entrepreneurs managing their own firms and intrapreneurs who are part of an existing firm.

In the World Series of ETF inflows, the Vanguard S&P 500 ETF (VOO) could do what the Los Angeles Dodgers just did in professional baseball: go back to back with another $100 billion in inflows for a second consecutive year.

As noted by TMX VettaFi Head of Research Todd Rosenbluth, fixed income ETFs are having a banner year amid record inflows. The Vanguard Total Bond Market ETF (BND) and Vanguard Total International Bond ETF (BNDX) were two of the top funds responsible for the $325 billion in net inflows (as of October 15).

With the first rate cut of 2025 in the books, the prospect of additional cuts only adds to the wall of worry for fixed income investors who are dealing with enough market uncertainty.

It might be auspicious timing that the VettaFi Q3 Fixed Income Symposium came less than 24 hours after the Federal Reserve instituted the first rate cut of the year. With that, investors must know how to navigate the current fixed income environment in which a Fed is easing monetary policy.