For perspective, indexing with bond ETFs is still small when compared to the overall size of the fixed-income market.

"There's over $100 trillion in the global fixed-income universe,” said Andrew Kadjeski, head of retail investor trading at Vanguard. “Yet, just 1% or $1 trillion of those dollars are actually in indexing strategies. There's lots of untapped potential for the ETF landscape.”

Despite rising debt levels, such as the soaring U.S. national debt now near $23 trillion, the bond market isn’t worried. So long as interest rates remain low and stock prices stay skittish, the bond bubble implosion is on hold—at least for now.

Ron DeLegge is founder and chief portfolio strategist at ETFguide, and is the author of “Habits Of The Investing Greats.”

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