Fixed-Income ETFs Survived Their First Crisis—Helped by the Fed

May 14, 2020, 9:00 AM

Sam Huszczo had long been a skeptic. Exchange-traded funds, already wildly popular among equity investors, were emerging as a cheaper, easier way to build a fixed-income portfolio than investing in a mutual fund. But after a decade-long bull market, no one could be sure how the new products would perform in a downturn. Would they exacerbate turmoil in their underlying markets?

Finally, near the end of 2018, the founder of SGH Wealth Management in Southfield, Mich., decided to give them a try, investing about 27% of the firm’s assets in the funds. Throughout 2019, things seemed to be working well, ...

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