ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Global Diversification
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Megatrends
    • Modern Alpha
    • Multi-Asset
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About Us
    • Swag Store
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Dual Impact Channel
  2. Fixed Income Investors Continue to Embrace ETFs
Dual Impact Channel
Share

Fixed Income Investors Continue to Embrace ETFs

Tom LydonDec 13, 2022
2022-12-13

In what’s been a treacherous year in the bond market, it’d be reasonable to expect that investors are ditching fixed income funds.

To an extent, that’s true, but it’s a matter of which bond funds they’re departing. Investors are ditching some actively managed fixed income mutual funds, but despite interest rate headwinds caused by the Federal Reserve, market participants are flocking to fixed income exchange traded funds.

That could prove to be good news for ETFs such as the IQ MacKay ESG Core Plus Bond ETF (ESGB B-). ESGB is potentially at the right place at the right time not only because ETFs are gravitating to bond ETFs, but also because they want more environmental, social, and governance (ESG) benefits when embracing bond ETFs.

“This year is shaping up to be the biggest ‘wrapper swap’ on record. Roughly $454 billion has been pulled from bond mutual funds on net while $157 billion has entered bond exchange-traded funds through the end of October. That would be the largest net annual swing toward ETFs by a wide margin, according to Strategas,” reported The Wall Street Journal.

Year-to-date, four of the top 10 ETFs in terms of new assets added are bond funds. That momentum is increasing in the current quarter, as six of the 10 ETFs in terms of fresh assets added are fixed income ETFs.

Though ESGB isn’t on either of those lists, investors are embracing the ESG/bond ETF. Since the start of the fourth quarter, market participants added nearly $66 million to ESGB, bringing its year-to-date inflows to $238.67 million. That’s a massive percentage of the $251.3 million in assets under management in the ETF, which came to market in June 2021. That’s happening in what’s undoubtedly a dismal year for bonds and equities.

“In the worst year for stocks since 2008, bonds have failed to provide a hedge. The S&P 500 is down 17%, and the Bloomberg U.S. aggregate bond index has fallen 11%. In fact, it is the worst year for bonds since at least 1975. Many wrapper swappers are plowing cash into Treasury ETFs from hard-hit mutual funds holding riskier bonds,” according to the Journal.

Understanding why advisors and investors are embracing bond ETFs isn’t difficult when considering two of the primary reasons, which are superior tax efficiency and lower fees relative to actively managed fixed income mutual funds.

For more news, information, and strategy, visit the Dual Impact Channel.

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X