Versatility is part of what makes ETFs an attractive proposition for money managers frustrated with traditional debt trading. (Photo: iStock)

(Bloomberg Markets) — Leighton Shantz had barely begun managing part of the $26 billion pension fund for Texas state employees when he got a crazy idea.

The fund’s floundering investment-grade bond portfolio was occupying his undivided attention, its strategy clearly broken. No matter what he tried, the securities couldn’t deliver sufficient yield or liquidity. He knew he had to get rid of them; he just wasn’t sure how.

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