Signs of U.S. economic struggles continue to grow ahead of September’s Federal Reserve interest rate meeting. Many advisors and investors find themselves looking to increase longer duration exposures to their portfolios ahead of potential rate cuts. The Neuberger Berman Total Return Bond ETF (NBTR) offers diversification and active management benefits across core plus bonds.
Notable weakening in recent jobs market data boosted market expectations for interest rate cuts this month. August hiring came in significantly under expectations, at just 22,000 jobs added. Meanwhile, the Bureau of Labor Statistics revised jobs added downward by 911,000 between April 2024 and March 2025 in an initial estimate. It puts the labor market on much more tremulous footing, lending credence to rate cut expectations this month.
Many advisors and investors maintained underweights to longer duration bonds while the inflation and interest rate narrative remained uncertain. Should rate cuts resume, those looking to increase core bond exposures would do well to consider NBTR.
NBTR relies on a research team of sector specialists, seeking to outperform across market cycles. The fund offers fixed income diversification, investing across a variety of bonds both within benchmark indexes and beyond. These include government and corporate bonds as well as mortgage-backed securities and asset-backed securities. The majority of the bonds NBTR invests in are investment grade. but up to 30% of the portfolio may comprise “junk bonds.”
The strategy invests in securities the team believes to be undervalued, while selling those it views to be overvalued. The fund invests primarily in domestic bonds and up to 15% in foreign bonds, as well as derivatives to hedge risk or for portfolio efficiency. The managers seek to keep an average duration within two years of the Bloomberg U.S. Aggregate Bond Index.
Portfolio construction includes analysis from sector specialty research teams. And the strategy seeks to offer performance across credit market environments. When evaluating securities, the team considers cash flows, a company’s balance sheet and ability to make payments, market positions, and more. When applicable, the team also considers financially material ESG factors.
NBTR carries an expense ratio of 0.37%.
For more news, information, and analysis, visit the Invest Beyond Cash Content Hub.
