Hedge funds and other investors somewhat ramped up their use of exchange-traded funds based on fixed-income securities in September through November, compared to a year ago, according to a Fed poll released on Monday.
Overall, the Fed's December senior credit officer opinion survey into dealer financing terms generally showed little changes in demand for funding compared to the previous three months.
But in a question on ETFs that invest in fixed-income assets, a third of dealers surveyed said their clients––including pension plans and endowments––had increased their use of the products somewhat over the past year.
Elsewhere in the survey, a third of dealers reported a decline over the past three months in financial leverage use by trading in real estate investment trusts, or REITs.
Twenty-two dealers were surveyed between November 19 and December 2. Those institutions account for almost all dealer financing of U.S. dollar-denominated provided to dealers, the Fed said.