This takeaway -- that bond ETFs are now a vital liquidity tool rather than a threat -- alongside the Fed’s actions have made the funds more appealing than ever.
Fixed-income ETFs took in a record almost $30 billion in May, Bloomberg data show. The largest credit fund, BlackRock’s iShares iBoxx $ Investment Grade Corporate Bond ETF, hit an all-time high on Monday after the Fed confirmed its plans to buy more bonds.
All of this has fed into the pipeline for new products. In the second quarter through Monday, 55 new U.S.-listed ETFs were introduced, compared with 45 in the first three months of the year, according to Bloomberg Intelligence. Debuts all-but stalled in March amid the worst of the coronavirus-driven selloff.
“That the ETF market functioned very well in a period of extreme stress if anything will only further accelerate adoption,” Johnson said.
This article was provided by Bloomberg News.