White: I'm Kent White, head of fixed income at Thrivent Asset Management.

Swensen: And I'm Cortney Swensen, senior portfolio manager, and we co-manage the Core Plus Bond ETF.

What’s your investment philosophy?

White: The Core Plus Bond ETF will be managed consistent with Thrivent’s broader fixed income investment philosophy as we seek to deliver competitive risk-adjusted performance. Our primary goal is to outperform through superior security selection. We view this as our core competency across all of our portfolios. We employ a team oriented approach led by frequent collaboration between sector teams, portfolio managers, analysts and traders. Our views are informed by fundamentals, and the Fund will leverage analyst expertise to help identify securities with the strongest risk-reward profiles using a relative value framework.

What kinds of bonds does the Fund invest in?

Swensen: The primary focus of the Core Plus ETF will be high quality, investment-grade-rated bonds, particularly investment-grade corporate bonds and high-quality securitized debt. There will also be an allocation to U.S. Treasuries, the size of which will be dependent on our current views on macroeconomic risk and credit risk.

Where does Thrivent Core Plus Bond Fund fit into an investor portfolio?

The Thrivent Core Plus Bond ETF will fill an existing hole in Thrivent’s fixed income lineup for our investors. It will be positioned between Thrivent’s Government Bond Fund and the Thrivent Income Fund. The ETF will offer some incremental yield over the Government Bond Fund, but still be a high-quality fund that should deliver reliable income with less yield and volatility than the Income Fund.

In what market environments should the Core Plus Bond ETF be attractive?

The Thrivent Core Plus Bond ETF should be an all-weather type of fixed income investment. It should outperform higher-quality government bond funds and traditional core bond funds in most market environments, except for those risk-off markets where credit generally underperforms U.S. Treasuries. In risk-off markets, it would also likely outperform more credit-focused funds, as the allocation to credit in the ETF would be less than those funds. The ability to flex the “plus” part of the ETF should also help us outperform in different market environments.

How is risk managed in this Fund?

Swensen: To help manage credit risk in the fund, we will rely heavily on our in-house sector teams. As the portfolio management team, we will also use numerous quantitative tools to monitor risk, reduce volatility and build a well-diversified portfolio. These tools also assist us in monitoring other portfolio risks, such as interest rate risk, our ratings profile, structure risk and liquidity risk.

What does "Core Plus" refer to?

White: “Core Plus” refers to the addition of high-yield corporate and emerging-market debt and a few other asset classes that are not typically in the core bond investment universe. The Core Plus strategy provides flexibility to the portfolio management team to strategically and tactically increase or decrease exposure to different asset classes based on our current views of relative value and risk.

How has the core plus space performed in this environment?

Swensen: In 2024, the Bloomberg U.S. Aggregate Bond Index, which is called the “Agg” and includes all publicly issued U.S. dollar-denominated, investment-grade debt, returned 1.25% as rising interest rates cause negative price returns, which overwhelmed yields that were in the 4–5% area for the year. In the core plus space, however, the Morningstar category median outperformed the Agg by over 100 basis points due to a greater allocation to risk assets, which had higher yields and experienced spread tightening as the economy continued to post strong growth.

What makes the Fund different from its peers?

Swensen: We aim to outperform peers through sector allocation and securities selection. Our investment team has a strong track record in categories adjacent to the core plus bond category, our experience investing across the yield curve, our extensive resources across asset classes and the application of the same rigorous investment process should translate well into the management of the ETF.

What experience do you bring to this Fund?

White: I've over 25 years of experience in the fixed income markets, primarily in investment-grade corporate credit where I started as a corporate credit analyst, I was the head of research, and I've managed multiple investment-grade portfolios over my time at Thrivent.

Swensen: I have 20 years of industry experience in various roles, including trading, corporate credit analyst and portfolio manager for both corporate credit and emerging-markets sovereign debt. Currently, I manage the Thrivent Short Term Bond Fund and the Thrivent Income Fund.

What excites you about Thrivent Core Plus Bond ETF?

White: I think that I can speak for everyone in Thrivent’s investment team that we're very excited to be launching our first fixed income ETFs. It's an area of the fixed income market that is growing rapidly, and we're excited to be able to offer these new products to our investors.

Swensen: This is the first portfolio that I've worked on that leverages the experience and expertise of all of our fixed income investment teams. I'm excited to collaborate across sectors and to offer to our shareholders exposure to all of these asset classes within one fund.