Episode summary
ETF Trends, Fixed Income Opportunities, and the Value of Active Management
ETF Prime
· · 57 min · Hosts: Nate Geraci, Simeon Hyman · Guests: Greg Stumm, Jason Greenblath
Summary
Greg Stumm framed American Beacon Partners as a behind-the-scenes platform that helps boutique managers scale through manager identification, product optimization, and client service. He argued that the ETF market is rewarding firms that can bring distribution, compliance, and ongoing due diligence, especially as more truly active ETF strategies come to market. He also said the firm uses its partnerships, including with ARK Invest, to help investors understand complex themes like innovation and crypto and to place them in the right portfolio context.
Stumm was skeptical that every strategy belongs in an ETF wrapper. He said multi-share class structures could create confusion and should not force capacity-constrained mutual fund strategies to dilute themselves just to add an ETF share class. On private assets, he argued that investors should separate liquid ETF exposure from private markets exposure rather than mixing the two in one product. On crypto, he said the key challenge is education and portfolio construction, not just demand from clients.
Jason Greenblath then made the case for active fixed income ETFs. He said the opportunity set is broader than index exposure because active managers can buy new issues, exploit mispricings, and use credit research across a much larger bond universe. He favored the two- to five-year part of the curve, warned against owning long-duration credit for carry in a tight-spread environment, and said his funds use selective high yield and securitized exposure only where the risk/reward looks compelling.
Key takeaways
- Greg Stumm said boutiques need scale, distribution, and ongoing due diligence to compete in ETFs, especially as active strategies proliferate.
- Stumm argued that a bad strategy does not become good just because it is placed in an ETF wrapper.
- Stumm said private credit and private equity are better housed in dedicated vehicles than in ETFs that only "sprinkle" private assets in.
- Jason Greenblath said active fixed income can add value through new-issue access, mispricing detection, and security selection across a far larger bond universe than equities.
- Greenblath favored the two- to five-year portion of the curve and warned that long-duration credit is vulnerable if the curve steepens or spreads widen.
Notable quotes
“we have three core competencies and one benefit for our client base”
“we talk to over 200 different specialty boutique managers a year trying to find kind of the best of the best”
“there has not been a huge proliferation of these, right? There's been a lot of really interesting ideas around kind of options exposure or more factor-based exposure”
“Is is is a bad strategy and a good rapper is still a bad strategy”
“we want to lock in some yield today. We want to lock in 30-year yields and be stuck in the long end of the curve. No, I I think that there are risks”
How the episode opens
We launched our first active ETF about eight years ago and I think we were one of the innovators um particularly in in fixed income. All right, joining me will be Greg Stum, CEO of American Beacon Partners, who in a nutshell, they work with investment managers to handle a lot of what goes on behind the scenes in order to help their products be successful. So things like distribution, back-end operations, administrative services, a lot of the aspects that can help investment managers operate their products more efficiently and certainly foster growth.
And so for example, they handle distribution for the Arc Invest ETFs. They're helping ARC get their products into the hands of investors and advisors. Uh they also have an ETF focused platform where they partnered with a man group on two ETFs.
Uh there's also another ETF they partnered with Ionic Capital Management on. But because of this role that American Beacon occupies, if you think about this, that gives Greg a front row seat to everything occurring in the world of ETFs, right? He can see emerging trends.
He knows what's working, what's not working. And importantly, he can see this from both sides, both the asset manager side and also from the investor's perspective. And so this should be interesting because we're going to find out what he is seeing right now, some of the key trends he's tracking in the ETF space and he'll also tell you more about the role of a company like American Beacon as well.
Now later I'll be joined by Jason Greenblat, senior portfolio manager and director of corporate credit research at American Century Investments, who's a top 15 ETF issuer. Really not that far away from knocking on the door of being a top 10 issuer. uh they have 17 ETFs under the American Century brand.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- etf trends
- active management
- distribution
- fixed income opportunities
- crypto
Companies and tickers mentioned
- American Beacon Partners
- American Century Investments
Watch the episode
Watch “ETF Trends, Fixed Income Opportunities, and the Value of Active Management” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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ETF Prime, this episode and its artwork belong to Nate Geraci. Octagon is not affiliated with the show; this page is an independent summary.
