Investors poured into fixed income ETFs in April as equity market volatility jumped with several month’s leading asset-gathering ETFs being bond funds.
For example, the iShares Short Treasury Bond ETF (NASDAQ: SHV), iShares 20+ Year Treasury Bond ETF (NASDAQ: TLT) and the iShares 1-3 Year Treasury Bond ETF (NYSEArca: SHY) were among the top ETFs in terms of new assets added last month.
The iShares Floating Rate Bond ETF (NYSEArca: FLOT) was another prolific asset gatherer in April. Floating rate notes, like the name suggests, have a floating interest rate.
Specifically, the notes’ have a so-called reset period with interest rates tied to a benchmark, such as the Fed funds, LIBOR, prime rate or U.S. Treasury bill rate. Due to their short reset periods, these floating rate funds have relatively low rate risk.
“Interest-rate risk also guided corporate-debt exposures, with investors allocating a record $1.3 billion to the iShares Floating Rate Bond ETF,” reports Bloomberg.