It’s the big story so far in 2026. Alongside AI, geopolitical market volatility is creating dislocations for investors to target. While some are more immediate and some are longer term, the ETF wrapper offers strategies that can attack all kinds of sectors. In corporate bonds, for example, growing volatility could create opportunities. The right ETF can separate the corporate bond wheat from the chaff.
Key Takeaways:
- Volatility has had an impact already this year, with investors facing challenges to their portfolios.
- Bond markets are one of the areas impacted, inviting investors to refresh their holdings therein.
- Corporate bond dislocations may offer opportunities for an active ETF like KORP to exploit.
Why are corporate bonds seeing these dislocations, and how can investors targe them? Economic pressure caused by rising energy prices is one key factor. Those prices, potentially set to be elevated for much of 2026, have a knock on effect on the rate market. Should inflation actually rise this year, or faith in U.S. debt fall, investors will have a harder time predicting the rate market.
As American Century Investments Vice President and Senior Portfolio Manager Jason Greenblath pointed out in a recent piece of analysis, this matters for corporate bonds. Corporations still need to borrow money for all kinds of purposes. When more firms issue debt at the same time, he wrote, that can see certain issuers make concessions.
