Investors nervous about rising Treasury yields have reportedly added more than $16 billion so far in 2013 to bond ETFs with low sensitivity to interest rates.

While there have been false alarms the past few years about higher rates, “ETF flows — which many consider to be the smart money — show that investors are seriously creeped out,” writes Eric Balchunas at Bloomberg Businessweek.

Within fixed-income sectors such as high-yield corporate bonds and Treasuries, many investors are buying ETFs with shorter durations to cushion the impact if rates rise more. [Two Short-Duration Bond ETFs To Consider]

They are also moving into bank loan funds such as PowerShares Senior Loan ETF (NYSEArca: BKLN). Bank loans have a floating-rate feature which typically resets every one to three months based on short-term interest rates. [First Trust Launches Bank Loan ETF]

Balchunas reports that popular short-duration ETFs this year include Vanguard Short-Term Bond ETF (NYSEArca: BSV) and iShares Barclays 1-3 Year Credit Bond Fund (NYSEArca: CSJ). [ETF Spotlight: Vanguard Short-Term Bond]

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