While some new market participants equate stock performance with overall economic conditions, the bond market often offers more reliable indicators of macroeconomic health. Analysts suggest paying attention to the Neuberger Berman Flexible Credit Income ETF (NBFC C+) as a potential barometer for 2026 fixed income trends. With a 9% return recorded in 2025, the fund reflects growing confidence in corporate credit stability. A key factor supporting this optimism is the expectation of low default rates, which is particularly relevant given NBFC’s allocation to non-investment grade debt instruments. n nCorporate bond yields have conveyed insights not only about interest rate trajectories but also about anticipated economic direction. Unlike government securities, corporate debt carries higher risk due to the greater likelihood of issuer distress. However, narrow credit spreads observed throughout the year suggest investors perceive strong growth prospects and solid repayment capacity among businesses. As noted by John Canavan of Oxford Economics, the limited premium demanded by bondholders indicates trust in continued economic strength. n nDespite modest yield demands, NBFC remains attractive to income-focused investors, offering a 30-day SEC yield of 6.37%. This combination of yield and risk management allows investors to benefit from income generation while maintaining safeguards against potential defaults. The current environment may therefore support further gains for similar fixed income vehicles in the coming year.
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This Bond ETF Holds Economic Clues
Many novice investors believe the equity market is the economy. However, the bond market is where to look when searching for clues regarding the health of the broader economy. On that note, advisors and investors may want to consider extending a careful look to the Neuberger Berman Flexible Credit Income ETF (NBFC C+) as a 2026 fixed income idea. After all, it’s often said that credit leads equity. Fortunately, there’s evidence credit is on solid footing entering 2026, as highlighted by NBFC’s 2025 gain of 9%. n nOne of the clues to glean from tight credit spreads could augur well for ETFs like NBFC: low default rate expectations. That’s undoubtedly a good sign when it comes to investing in corporate debt. It’s also material in discussing NBFC, because the ETF devotes some of its roster to non-investment grade bonds. n n“Meanwhile, corporate bond yields have been sending signals of their own — about interest rates, yes, but also about where the economy is headed,” reported Marketplace.org. “Corporate bonds are generally considered to be riskier than government bonds, since companies are more likely to run into trouble and default than the U.S. government.” n nThe low spreads seen this year in the corporate bond market have facilitated upside for ETFs such as NBFC. More of the same could be in store in 2026. n n“In fact, spreads have been fairly low for most of this year. In other words, investors aren’t demanding much extra compensation from companies,” according to Marketplace.org. “It’s a sign that investors think economic growth will stay strong and that companies will be in a good position to pay back their debt, according to John Canavan, lead market analyst at Oxford Economics.” n nWhile investors aren’t overly demanding when it comes to the yields they’re expecting from corporate debt, that doesn’t mean NBFC lacks appeal on that front. The opposite is true, as highlighted by the ETF’s stout 30-day SEC yield of 6.37%. That says investors can have their income cake and eat it too while embracing a portfolio with guardrails against default risk. n nFor more news, information, and analysis, visit the Invest Beyond Cash Content Hub.