ETF Trends
ETF Trends

Exchange traded funds listed around the world that track fixed-income assets saw their best monthly inflows ever in January as investors frustrated with rock-bottom interest rates turn to bond ETFs to tailor portfolios and boost yield.

Global fixed-income ETFs set an all-time high in January with net inflows of $9 billion, up from the previous monthly record of $6.7 billion in January 2009, according to BlackRock, which manages the iShares ETFs. [Investors Flock to High-Yield ETFs]

“In this challenging environment with sustained levels of low yield, now more than ever investors are looking for new ways to generate income,” said Peter Fisher, head of BlackRock’s fixed-income portfolio management. “We see a quiet revolution building in the asset class as more and more investors learn how to use fixed-income ETFs to build portfolios that combine low risk with the potential for yield.”

The first ETFs on the scene in the 1990s followed stock indexes and most of the assets reside there, but the fixed-income side of the business is making rapid strides to catch up with equity funds. [Five Things to Know About Bond ETFs]

“We are reaching a critical mass with fixed-income ETFs. We’re seeing investors exercise more control of their investing through ETFs,” said Matt Tucker, head of fixed-income strategy at BlackRock’s iShares, in a Bloomberg report.

“Investors are shifting to more customized segments in the market,” he added. [Are High-Yield ETFs Also High Risk?]

iShares iBoxx High Yield Corporate Bond (NYSEArca: HYG)


The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.