If you want income but don't want to stress about whether your bonds might implode, Gabelli Funds has a pitch for you. The firm just launched the Gabelli High Income ETF (GBHI), an actively managed fund that's all about delivering strong yields without wandering too far into the danger zone of credit risk.

The ETF started trading Monday and is managed by Wayne Plewniak, Gabelli's Head of Fixed Income. His approach leans heavily on bottom-up credit research, hunting for opportunities where the return justifies the risk and steering clear of the stuff that keeps bond investors awake at night.

Quality Over Chaos

Here's the strategy in plain English: GBHI focuses on what the firm calls "upper-tier" high-yield corporate bonds. Think BB-rated and stronger B-rated issuers—the kind of credits that offer attractive yields but aren't teetering on the edge. The fund will also dip into investment-grade bonds, hybrids, or equity-linked securities when the team spots something worth pursuing, but the core bet is on higher-quality high yield.

Under normal conditions, the fund targets an average credit quality of BB- and keeps effective duration between two and five years. That's the sweet spot for generating income without taking on excessive interest rate sensitivity. Diversification is baked in, too: no single issuer gets more than 3% of the portfolio, and no industry tops 15%. It's a structure designed to avoid concentration blowups while staying flexible enough to chase opportunities across different sectors.

Charles LaRosa, Gabelli's Head of ETFs, said the launch reflects the firm's broader push to package its research-driven investment processes into the ETF wrapper—transparent, tax-efficient, and increasingly popular with advisors. Plewniak added that the fund is built for investors who want solid income from high-yield markets but aren't interested in gambling on distressed credits or taking unnecessary risks.

A First-Year Freebie

To sweeten the deal, Gabelli is waiving GBHI's management fee for the entire first year. After that, the fee settles in at 0.55% annually. It's a smart move to grab early attention in a crowded market where active bond ETFs are gaining traction thanks to their flexibility and real-time transparency.

With this launch, Gabelli is adding another tool to its active ETF lineup, giving income-focused investors a way to balance yield hunting with disciplined credit selection. In a market where caution and income are both top priorities, that's a combination worth paying attention to.