Joanna Gallegos

Joanna Gallegos is a co-founder of BondBloxx, a fixed income ETF firm that has grown to over $3 billion in assets in a remarkably short time. Joanna has been in ETFs her entire career, starting at Barclays Global Investors in the early days of iShares, then moving to BlackRock when it acquired BGI, and spending nearly a decade at JP Morgan helping build their ETF business from scratch. She's launched 175 ETFs and counting. On this episode of Behind the Ticker, Joanna joins Brad to talk about BondBloxx's rapid growth, the firm's approach to precision fixed income exposure, and their CCC-rated high yield corporate bond ETF (XCCC).

Building BondBloxx from Scratch

BondBloxx was co-founded in October 2021 by a team of fixed income ETF veterans. CEO Leland Clemens was an early architect of fixed income ETF structure, literally doing the work of going desk to desk at major firms to explain how to price bond portfolios and make the creation/redemption mechanism work for fixed income. Co-founder Tony Kelly brought additional institutional expertise. The founding thesis was that fixed income ETF investors deserved the same level of precision and choice that equity investors had enjoyed for decades.

The timing turned out to be fortuitous. BondBloxx launched right as interest rates began rising aggressively, which brought fixed income back into focus after years of being an afterthought in a zero-rate world. Joanna says there was higher volatility that created opportunities, and fixed income came into view at exactly the right moment for a new firm telling a differentiated story. But she's quick to credit the team's execution: an exceptional CMO who built the brand "brick by brick," experienced ETF sales people who knew exactly who to call on day one and how to follow up on day 2, day 90, and day 120.

She shares a telling anecdote about brand building: at the playground pushing her kid on a swing, someone recognized the BondBloxx hat she was wearing and wanted to talk about the firm's products. The team wears BondBloxx gear everywhere, conferences, airports, weekends, even art spaces. It's a family affair, and the brand recognition punches well above the firm's weight.

XCCC: Targeted CCC-Rated High Yield Exposure

XCCC is a CCC-rated U.S. high yield corporate bond ETF. This is a very specific tranche of the high yield market, the lowest-rated tier before default. Why would anyone want that? Joanna explains that most high yield ETFs blend BBs, single Bs, and CCCs together, which dilutes the risk and return characteristics of each tier. For investors who specifically want the higher yields and higher risk of CCC-rated bonds, or who want to pair different credit tiers tactically, having a targeted product is essential.

The logic mirrors what happened in equity ETFs years ago. You used to only be able to buy "the market" through broad indices. Then sector, size, and style ETFs arrived, and investors could build more precise portfolios. BondBloxx is applying that same precision to fixed income. If you believe CCCs are attractively priced relative to their default risk, you can take a targeted position. If you think BBs are the better risk-adjusted bet, they have products for that too. The building blocks approach lets advisors construct fixed income allocations with the same specificity they use for equities.

How BondBloxx Scaled to $3 Billion

Joanna is candid about the growth formula: know-how, brand, and relentless execution. The founding team knew the fixed income ETF business from having built it at iShares and JP Morgan. They knew which products to launch first, how to price them competitively, and how to position them against incumbents. The sales team came from top ETF firms and had established relationships with the advisor and institutional channels.

But Joanna warns that what works in year one doesn't work in year three. The degree of difficulty keeps leveling up. At $3 billion, the conversations shift from "here's who we are" to "here's how we're positioned for the rate environment" and making sure BondBloxx captures its share of the massive migration from money market funds into credit as rate expectations shift. The firm is constantly evolving its positioning and messaging to stay relevant as the macro environment changes.

She also emphasizes the importance of being everywhere physically. The sales team covers the country, and the firm invests heavily in conferences, advisor events, and face-to-face meetings. In an industry where trust matters, especially for a newer firm asking advisors to put client money into fixed income products, physical presence and personal relationships still drive allocation decisions.

Key Takeaways

• BondBloxx grew from launch to over $3 billion in assets by bringing precision fixed income ETFs to market, giving investors targeted exposure to specific credit tiers rather than blended high yield.
• XCCC provides targeted exposure to CCC-rated U.S. high yield corporate bonds, the lowest-rated tier, allowing investors to make specific credit quality bets rather than accepting a blended high yield allocation.
• Joanna has launched 175 ETFs across her career at Barclays/iShares, BlackRock, JP Morgan, and now BondBloxx. The co-founding team includes pioneers who built the fixed income ETF infrastructure from scratch.
• The firm's growth formula combines veteran know-how, aggressive brand building (BondBloxx gear everywhere, strong digital presence), and experienced sales hires who had established advisor relationships from day one.
• BondBloxx's building blocks approach to fixed income mirrors the precision that equity investors have had for years through sector, size, and style ETFs. Find them at bondbloxxetf.com.

Listen to the full conversation on Spotify, Apple Podcasts, or YouTube.