Corporate Bond ETF KORP Nearing $1 Billion AUM Milestone
The ETF landscape includes a growing roster of actively managed strategies that can invigorate portfolios. This particularly includes the fixed income space, where the active ETF wrapper can offer some major benefits compared to index-tracking passive bond funds. The American Century Diversified Corporate Bond ETF (KORP) stands out as a strong actively managed option as it approaches a key $1 billion AUM milestone.
Key Takeaways:
- KORP is on track to hit $1 billion in AUM by the end of this year.
- The active corporate bond ETF charges a 29 bps fee to offer exposure to the firm’s best ideas in the corporate space.
- According to American Century Investments data, the strategy generated an unsubsidized 30-day SEC yield of 5.48% as of July 31.
The active corporate bond ETF charges a 29 basis point fee and looks to generate income via U.S.corporate debt. While most of the portfolio is allocated to investment-grade debt, its active remit allows selective risk to boost yield.
The strategy benefits from insights provided by its team, including American Century Investments head of corporate credit Jason Greenblath. The active corporate bond ETF leverages insights to actively invest in a complicated, but critical fixed income space.
The bifurcated corporates space — split between massive hyperscale debt issuance and myriad opportunities elsewhere — merits an active approach. Where passive funds are obligated to trust an index that has a strict set of rules to follow, active corporate bond funds can adapt. They can adjust to events or find opportunities in different areas.
For example, KORP’s active remit empowers it to find opportunities based on securities’ capital structures. Certain debt offerings, like perpetual bonds with their idiosyncratic rules, can be exploited by savvy investors empowered to actively invest.
Active Corporate Bond ETF KORP on the Rise
Together, that has helped the active corporate bond ETF rise closer and closer to $1 billion in AUM. According to ETF Database data, KORP currently sits at $917 million AUM — growing by almost $200 million over the last six months and more than a quarter billion YTD.
The strategy offered a 5.48% 30-day SEC unsubsidized yield as of July 31st, according to American Century Investments data. With all factors combined, KORP’s $1 billion milestone is well within reach this year and may inspire new investor attention.
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