Evaluating High-Yield Distributions from NBI ETFs in a Post-2025 Market Environment

The post-2025 global investment landscape has been marked by a seismic shift in asset allocation strategies, driven by macroeconomic stabilization, rising demand for alternative returns, and the growing appeal of active management. As traditional 60/40 portfolios face challenges due to the prolonged positive correlation between equities and bonds, investors are increasingly turning to high-yield ETFs and alternative assets to diversify risk and capture alpha. National Bank Investments Inc. (NBI), a subsidiary of the National Bank of Canada, has positioned its ETF lineup to align with these trends, offering products that blend active management, sustainability, and exposure to non-traditional asset classes. This analysis evaluates NBI's high-yield ETFs-specifically the NBI Active Canadian Preferred Shares ETF (NPRF), the NBI Sustainable Canadian Equity ETF (NSCE), and the NBI Global Private Equity ETF (NGPE)-to assess their performance, strategic alignment with current economic dynamics, and income-generating potential.

A Market Transformed: The Rise of Active and Alternative ETFs

The post-2025 surge in ETF adoption has been fueled by a global appetite for flexibility and diversification. U.S.-listed ETFs alone attracted over $1.3 trillion in inflows in 2025, with active ETFs capturing 38% of total fixed income inflows and 80% of year-to-date launches in the same period. This shift reflects investor demand for strategies that adapt to volatile markets and generate uncorrelated returns. Active ETFs, particularly in fixed income and alternatives, have emerged as critical tools for managing risk and accessing new return streams. For instance, active fixed income ETFs have outperformed passive counterparts by leveraging tailored security selection and liquidity management, while alternative ETFs-spanning private equity, real estate, and digital assets-have democratized access to once-hard-to-reach opportunities.

NBI ETFs: High-Yield Distributions and Strategic Alignment

NBI's ETF portfolio is designed to capitalize on these trends, with a focus on income generation and strategic diversification. Three standout products-NPRF, NSCE, and NGPE-exemplify this approach:

1. NBI Active Canadian Preferred Shares ETF (NPRF)
   NPRF targets high-yield income through Canadian preferred shares, a niche but resilient sector. For 2025, it is projected to distribute $0.9236 per unit, translating to a monthly cash distribution of $0.105975. This aligns with the post-2025 trend of investors seeking stable income in a high-rate environment. Active management allows the fund to adjust exposure to credit risks and optimize yield, a strategy that resonates with the growing preference for hands-on fund management.

2. NBI Sustainable Canadian Equity ETF (NSCE)
   NSCE combines ESG criteria with Canadian equities, distributing $1.1847 per unit annually (or $0.035013 quarterly) in 2025. Its focus on sustainability reflects the broader shift toward responsible investing, a trend that has gained momentum as institutional and retail investors prioritize long-term value creation over short-term gains. By integrating ESG factors, NSCE not only mitigates regulatory and reputational risks but also taps into sectors poised for growth, such as clean energy and sustainable infrastructure.

3. NBI Global Private Equity ETF (NGPE)
   NGPE stands out for its exposure to private equity, a cornerstone of the post-2025 alternative asset boom. With a projected 2025 distribution of $5.5520 per unit and a 10.76% yield as of December 2025, NGPE offers investors access to high-growth, non-publicly traded companies. This aligns with macroeconomic trends such as innovation-driven growth and the deployment of "dry powder" capital in private equity to target undervalued assets. NGPE's strategy also benefits from NBI's emphasis on hybrid financing solutions and first-lien loans, which provide stability in a high-rate environment.

Strategic Adjustments: NBI's Response to Market Dynamics

NBI has proactively adjusted its product offerings to stay ahead of market shifts. For example, the firm merged the NBI Global Real Assets Income ETF into the NBI Global Real Assets Income Fund in 2025, enhancing operational efficiency and investor flexibility. Additionally, NBI has expanded its focus on private credit and venture capital, sectors that offer inflation mitigation and alpha generation potential. These moves underscore the firm's commitment to aligning with post-2025 trends, including macroeconomic stabilization and the integration of alternative assets into core portfolios.

Conclusion: A Compelling Case for Income-Seeking Investors

In a post-2025 market characterized by dispersion and uncertainty, NBI ETFs like NPRF, NSCE, and NGPE present compelling opportunities for income-focused investors. Their high-yield distributions, active management strategies, and alignment with alternative assets and ESG trends position them to outperform traditional fixed-income and equity allocations. However, investors must remain mindful of management fees and the inherent risks of active strategies and private equity exposure. For those seeking diversified, income-generating solutions in a rapidly evolving landscape, NBI's ETFs offer a well-structured bridge between innovation and stability.