The Neuberger Berman Flexible Credit Income ETF (NBFC) seeks to generate high current income through active management of a diversified portfolio of credit securities. This flexible credit strategy invests across corporate bonds, bank loans, convertible securities, and other income-producing debt instruments of varying credit qualities and maturities.
How It Works
NBFC employs an actively managed, flexible approach that allows portfolio managers to opportunistically allocate across different credit sectors based on market conditions. The fund can invest in investment-grade and high-yield corporate bonds, bank loans, convertible bonds, and emerging market debt. Portfolio composition adjusts dynamically based on credit cycle positioning and relative value opportunities. The management team conducts fundamental credit analysis to identify securities offering attractive risk-adjusted returns while managing overall portfolio duration and credit risk exposure.
Key Features
- Active credit management allows tactical allocation across bond sectors, bank loans, and convertibles based on market opportunities
- Flexible mandate enables investment across credit spectrum from investment-grade to high-yield without benchmark constraints
- Attractive 5.87% dividend yield provides meaningful current income for investors seeking regular distributions
Risks
- This ETF can lose value if credit spreads widen during economic stress, potentially causing 10-20% declines in high-yield credit environments
- Active management risk means the fund may underperform passive credit benchmarks if security selection or sector allocation decisions prove incorrect
- Interest rate increases can reduce bond values, particularly impacting longer-duration holdings within the flexible credit portfolio
Who Should Own This
Best suited for income-focused investors with medium-to-high risk tolerance seeking current yield above traditional bond funds. Appropriate as a satellite holding (10-20% of fixed income allocation) for investors with 3+ year time horizons who want professional credit management and flexibility to capitalize on changing market conditions.