Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTNick Peters-GoldenThu, June 25, 2026 at 6:34 PM GMT+2 2 min readThis article was originally published on ETFTrends.com.An end to the U.S.-Israel-Iran conflict appears to finally be set. As the dust settles, however, investors now turn to an uncertain second half of 2026. Headlines may be flashy, but it's structural factors like inflation that may prove the most impactful. For bond portfolios in particular, active management can help investors adapt to those conditions.Inflation rose in May, with the Consumer Price Index hitting 4.2% per the Bureau of Labor Statistics.Structural inflation, then, could loom large over portfolios even as headline issues diminish.Active ETFs like TAGG can potentially ride out threats to credit markets or shifting rates.Recent analysis from T. Rowe Price's Midyear Outlook adds further color to that critical dynamic for the second half."Geopolitical tensions are accelerating the fragmentation of the global economy as governments prioritize energy security, domestic industrial capacity, and diversified supply chains," wrote T. Rowe Price Asia sovereign analyst Christopher J. Kushlis."This is likely to prove structurally inflationary, increasing costs through reshoring, tariffs, supply-chain duplication, higher defense spending, and more volatile central bank policy paths," he added.See more: As 2026 Inflation Gets Stickier, Active Value ETF TVAL SpikesWhat's more, per further comments from T. Rowe Price credit analyst Razan Nasser, credit market resilience could be tested by further shocks, while central banks themselves face pressure "to compromise their inflation targets."Should those pressures start to create more challenges in credit markets, or impact rates, then, investors may not want their bond portfolios to get caught out. Passive bond funds offer simplicity in some ways, but active bond ETFs can adapt more quickly. What's more, they can also more closely scrutinize issuers to potentially produce stronger performances.That's where an ETF like TAGG can really play a helpful role. The T. Rowe Price QM U.S. Bond ETF (TAGG) charges a very competitive fee of just eight basis points (bps). It looks to outperform its benchmark, the Bloomberg U.S. Aggregate Bond index.See more: