Specifically, in October, high-yield bond ETFs traded $3.2 billion per day, with iShares HY ETFs making up 66% of the total share at $2.1 billion per day. Investment-grade corporate bond ETFs traded $1.7 billion.
“Record trading volumes during October’s bout of market volatility is further evidence that FI investors are increasingly utilizing FI ETFs to manage risk, liquidity and aid in price discovery in high velocity markets,” according to BlackRock.
Many naysayers and critics have warned that during periods of high volatility, especially in the rising rate environment, bond ETF investors could head for the exits in droves, causing pricing discrepancies on the heavy redemptions as providers try to exchange ETF shares for less liquid individual debt securities.
However, the recent activity only shows that many investors have relied on the ETF investment vehicle as a way to manage exposure and help price discovery in periods of extreme market oscillations.
For more information on the ETF industry, visit our ETF performance reports category.