Fixed-income strategies have become a bigger focus for many fund providers, including BlackRock and State Street Global Advisors. Despite the rapid growth of the ETF industry, the ETF space is still largely dominated by equity-based ETFs, with the development of passive bond ETFs falling behind.
However, bond ETFs have brought in over $100 billion in new investment money so far this year while broader ETF flows slowed, according to Bloomberg data.
Additionally, growth among smart beta, factor-based strategies and ESG or environmental, social and governance are gaining momentum.
“While these areas still represent a small portion of the total index landscape, investors are demanding more choices and as a result, providers are creating new indexes where they can offer more targeted exposure,” Redding added.
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