Data from ETFGI on European exchange traded funds for the end of August shows, of the total 3,333 ETFs, 567 were exposed to fixed income, compared with the 1,528 with equity exposure.
Deborah Fuhr runs ETFGI and has been doing research on the sector since 1997. She says: “For the first 10 years [of ETFs] it was all equities; it wasn’t contemplated initially that ETFs would be covering fixed income or other asset classes, and then it moved to fixed income and we have seen significant growth.
“The first fixed income ETF, launched in Canada, is turning 25 in November this year.”
And Finn Houlihan, managing director of AAF Financial, says ETFs are a good way to bring down costs for clients while capturing the benefits of fixed income.
He notes fixed income markets are “alive and kicking again” after a “lost decade of interest rates”..
The number of ETFs exposed to fixed income, compared with the 1,528 with equity exposure.
David Batchelor, senior fund analyst at Quoted Data, says ETFs can offer advantages over the alternatives of gaining exposure to bonds.
“They offer intraday liquidity and diversified exposure, and access to an asset class that can be difficult to access directly for many investors, not least due to high minimum investment levels for individual issues.
“ETFs offer an easy way to fine-tune duration and credit exposure at low cost, with fees typically being much lower than for actively managed funds.”
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