Well there has been a lot of development in duration focused ETF offerings, we feel this area will continue to expand in the decades to come. As duration focused offerings continue to develop, they are likely to take continued market share from active individual bond managers.

Summary

In summary, ETF issuers have thought of several ways to slice and dice the fixed income space. Their creativity has allowed portfolio managers to stay within the guidelines of IPS documents without having to buy individual fixed income portfolios. The availability of these ETFs allows investors with investment restrictions to enjoy the many added benefits of ETFs: including lower cost, diversification, liquidity and transparency.

Likewise, ETFs are very helpful in allowing smaller accounts to employ investment restrictions successfully. There is little doubt the ETF industry will continue to think creatively about fixed income offerings – and investors will continue to benefit from this innovation.

This article was written by Tyler Denholm, CFA, who is VP Investment Management & Research at TOPS ETF Portfolios, a participant in the ETF Strategist Channel.

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