“We’re continuing to see investors adopt fixed income ETFs as an essential instrument for accessing the bond markets. Over the past few weeks, we’ve seen a global flight to US Treasuries driven by concerns around events in Greece, as well as continued high US yields relative to other sovereign bond markets. At the same time you have seen investors move into move into high yield debt in a continued search for income. When we take a longer lens, we see traditional bond buyers embracing the ability to access a diversified portfolio of bonds in an ETF that makes its holdings, costs and performance transparent to all investors,” said Matt Tucker, head of fixed income investment strategy at BlackRock, in a statement.
Although bond ETFs have roughly $300 billion in combined assets under management, there is room for growth as highlighted by a more than fivefold jump in bond ETF assets since 2008.
“Despite significant growth over the last decade, the ETF market remains small when compared to the cash bond and mutual fund markets. However, we believe assets in fixed income ETFs could reach $2 trillion globally over the next decade,” says BlackRock. [Room for Growth in the Bond ETF Market]
iShares iBoxx $ High Yield Corporate Bond ETF
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of HYG and JNK.