Aristotle Expands Into Active Fixed Income ETFs With Three New Income Strategies

Three Approaches to Income Investing

The Aristotle Core Plus Income ETF (ARCP) is designed as a core bond allocation. The fund invests primarily in investment-grade debt securities, including corporate bonds, asset-backed securities, mortgage-related securities, U.S. Treasuries, and agency securities. At least 75% of assets are allocated to investment-grade holdings, while up to 25% may be invested in higher-yielding non-investment-grade bonds.

The fund seeks to maintain a duration within two years, plus or minus, of the Bloomberg U.S. Aggregate Bond Index, making it a potential core holding for investors seeking broad fixed income exposure with active management.

For investors willing to take a more opportunistic approach, the Aristotle Multi-Sector Income ETF (ARMS) offers the greatest flexibility of the three strategies. The fund can dynamically adjust its exposure between investment-grade and high-yield debt depending on market conditions, with the ability to allocate up to 65% of assets to non-investment-grade securities.

ARMS also has a broader duration range of zero to eight years and can invest modestly in foreign currency-denominated bonds, convertible securities, and equities. This flexibility allows portfolio managers to seek opportunities across multiple fixed income sectors as market conditions evolve.

Meanwhile, the Aristotle Short Term Income ETF (SDUR) focuses on preserving income opportunities while maintaining lower interest rate sensitivity. The fund primarily invests in investment-grade debt instruments and targets a duration range of one to four years. It may allocate up to 15% of assets to high-yield securities, providing a balance between income generation and capital preservation.

A Consistent Research Framework

While each ETF serves a different role, all three are built on Aristotle's fundamental research process.

The approach combines bottom-up credit analysis with a top-down assessment of market conditions. Portfolio managers evaluate individual issuers based on factors such as competitive positioning, management quality, and their ability to repay or refinance debt obligations. This issuer-level research is complemented by broader portfolio positioning decisions that determine sector allocations and risk exposures.

The team also incorporates relative-value analysis to identify opportunities across fixed income sectors, purchasing securities they believe offer attractive risk-adjusted return potential and selling positions when valuation targets are reached or fundamentals deteriorate.

Why Investors Should Consider the ETFs

The Aristotle fixed income ETFs combine active management with a disciplined, research-driven investment process designed to identify opportunities across fixed income markets.

Each ETF provides access to a distinct investment objective while leveraging the firm’s collaborative credit research and portfolio management expertise.

Together, the lineup offers investors a range of solutions that can help address different income, risk, and duration objectives.

Whether investors are looking for a core bond allocation, a flexible multi-sector strategy, or a shorter-duration income solution, the three-fund suite provides targeted options within a consistent investment framework.

Jeff Klingelhofer, CFA, Managing Director with Aristotle Pacific Capital and co-Portfolio Manager for all three ETFs, explained the rationale behind the launch:

“Advisors and investors need the right tools to build tactical income portfolios that are designed to navigate today’s markets. Simply relying on decades-old, siloed approaches may leave investors underexposed to key corners of the income landscape and missing attractive opportunities. Our relative-value process differentiates us by identifying opportunities across sectors through rigorous bottom-up credit research and disciplined relative-value analysis. We believe these ETFs provide investors and advisors with a differentiated way to access our fixed income capabilities through a flexible, actively managed ETF.”

With ARCP, ARMS, and SDUR, Aristotle is entering the ETF market with a comprehensive fixed income toolkit that spans core bonds, opportunistic income, and short-duration strategies, offering investors multiple ways to pursue income while adapting to changing market conditions.

About Aristotle Investment Services

Aristotle Investment Services, LLC (AIS) is the investment advisor to Aristotle Funds, a family of actively managed mutual funds and ETFs with approximately $16bn in AUM as of 6/30/26. Wholly owned by Aristotle Capital Management, AIS is part of the broader Aristotle organization—an employee-owned, independent group of affiliated investment advisers with expertise across equity and fixed income strategies. AIS oversees the business operations of the Aristotle Funds complex while partnering with experienced sub-advisors for day-to-day portfolio management.

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.