Beyond Bonds: How Pacer and Barings Are Redefining Fixed Income ETFs

MALVERN, PA – June 23, 2026 – In a significant move aimed at reshaping the fixed-income landscape, Pacer ETFs and global asset manager Barings today announced a strategic collaboration with the launch of two actively managed exchange-traded funds. The Pacer Barings CLO Market Flex ETF (NASDAQ: AAAP) and the Pacer Barings Secured Credit Flex ETF (NASDAQ: PBSC) are designed to dismantle the high walls that have historically cordoned off institutional-grade credit strategies from the broader investing public.

This launch is more than just the introduction of new tickers; it represents a calculated response to a market grappling with the limitations of traditional bond portfolios. By packaging complex, actively managed strategies into the transparent and liquid ETF wrapper, the two firms are betting they can provide a timely solution for investors seeking diversification, higher income potential, and a defense against interest rate volatility.

The Search for Yield in a New Fixed-Income Era

The investment playbook that has served investors for decades is undergoing a forced revision. The conventional 60/40 stock-bond portfolio has faced significant headwinds, prompting a widespread search for alternative sources of income and diversification. Traditional fixed-income assets, once a reliable ballast, have become a source of anxiety for many, vulnerable to shifts in central bank policy and inflationary pressures.

In this environment, sophisticated investors have increasingly turned to alternative credit markets, particularly Collateralized Loan Obligations (CLOs) and other forms of secured debt. CLOs, which are portfolios of leveraged loans bundled together and sold to investors in tranches, offer floating-rate exposure that can perform well when interest rates rise. Secured credit, which includes assets backed by specific collateral, provides an additional layer of structural protection. Historically, however, these have been the exclusive domain of large institutions, insurance companies, and pension funds with the capital and expertise to navigate their complexity.

This is the precise challenge Pacer and Barings aim to solve. "As investors continue to look beyond traditional fixed income for diversification and income opportunities, we see growing demand for actively managed credit strategies that can adapt across market environments," said Sean O'Hara, President of Pacer ETF Distributors. The new ETFs are built to meet this demand head-on, offering a gateway to these previously inaccessible markets.

Deconstructing the New Offerings: AAAP and PBSC

At the heart of the launch are two distinct but complementary strategies, both managed by Barings' highly regarded Global High Yield and CLO platform, which oversees more than $95 billion in assets. The operational decision to create two separate funds allows investors to choose their desired level of exposure and risk.

The Pacer Barings CLO Market Flex ETF (AAAP) offers a focused dive into the world of CLO debt. The fund seeks current income and capital preservation by actively managing a portfolio of CLO investments across various rating categories. Crucially, the strategy aims to maintain an overall investment-grade quality profile, providing a measure of security while tapping into the income potential of the asset class. Its focus on floating-rate debt instruments makes it a potentially powerful tool for portfolios in a shifting rate environment.

In contrast, the Pacer Barings Secured Credit Flex ETF (PBSC) takes a wider, more opportunistic approach. While its primary objective is also a high level of current income, it selectively targets capital appreciation as a secondary goal. The "Flex" in its name signifies its mandate to allocate across a broad spectrum of secured credit, including senior secured loans, corporate bonds, and CLOs. The strategy's active management emphasizes investments backed by collateral and other structural protections, seeking to identify the most attractive risk-adjusted opportunities across the credit landscape.

A Blueprint for Growth: The Pacer-Barings Strategic Play

The most compelling aspect of this launch is the operational innovation embedded in the partnership itself. It serves as a powerful case study in strategic symbiosis, pairing a nimble and powerful distribution engine with deep, specialized investment acumen. Pacer ETFs has built a formidable presence in the ETF market, growing to over $41 billion in assets under management by creating strategy-driven products that resonate with advisors and their clients.

Barings, a subsidiary of MassMutual with $481 billion in assets, brings institutional credibility and a world-class credit team. This alliance allows Pacer to offer a product of a complexity it could not manage alone, while giving Barings an efficient, scalable entry into the rapidly growing retail and wealth management channels. It's a model that leverages the core competencies of each firm to create a product that is greater than the sum of its parts.

“These ETF launches mark an important milestone for our Global High Yield and CLO platform, extending access to our institutional capabilities to a broader set of investors and supporting our continued growth in wealth channels,” noted Scott Roth, Head of Global High Yield at Barings. This statement underscores the strategic intent: to bridge the gap between institutional product manufacturing and mainstream investor demand.

Democratizing the Alternative: A New Tool for Investors

Ultimately, the launch of AAAP and PBSC is a landmark event in the ongoing democratization of alternative investments. For decades, financial advisors have sought ways to deliver the diversification and return benefits of institutional strategies to their clients, only to be stymied by high minimums, long lock-up periods, and opaque structures. The ETF wrapper shatters these barriers, offering daily liquidity, full transparency of holdings, and accessibility through any standard brokerage account.

This development equips advisors with sophisticated new tools to build more resilient portfolios. In a market where traditional asset classes are showing signs of correlation and strain, the ability to add a stream of income derived from actively managed, collateral-backed credit can be a significant advantage. It reflects a broader industry shift where the lines between institutional and retail investing are blurring, driven by technological innovation and a persistent demand for better outcomes. By combining Pacer's distribution savvy with Barings' credit expertise, this partnership is not just launching new funds; it is actively forging a new pathway for how complex investment strategies are delivered to the modern investor.