As many ETF observers have noted, volume begets volume. These ETFs that track notoriously illiquid markets have been growing in popularity as investors sought out liquid instruments to express their views on the fixed-income market. While trading volumes in the fund have increased, trading in the underlying debt market has not been particularly elevated, reflecting the increased usage of ETFs as a more liquid proxy for exposure.
Related: 28 ETFs for Investment-Grade Corporate Bond Exposure
“Global fixed-income ETFs, which track bond indexes and trade like stocks, attracted $66.7 billion of inflows this year, according to data compiled by BlackRock Inc. That puts the market on pace to top last year’s record total of $91.7 billion,” according to Bloomberg.
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iShares iBoxx $ Investment Grade Corporate Bond ETF
Tom Lydon’s clients own shares of LQD.