”Enthusiasm for bonds is proving to be a bonanza for BlackRock’s fixed-income exchange traded funds, which have attracted more investor cash since US interest rates started rising than all their competitors combined.BlackRock, the world’s largest money manager, is capitalising on growing interest among wealth managers and other asset managers in using ETFs instead of or in addition to buying bonds directly. From March last year to the end of January, there were $146bn net flows into BlackRock’s fixed-income ETFs, while competitors took in $134bn.
“Bond ETFs have been a bright spot for BlackRock after a year when its overall assets under management shrank by nearly 15 per cent to $8.6tn. Chief executive Larry Fink considers them a main driver of revenue growth. BlackRock predicts that bond ETF assets industry-wide will more than double from $1.8tn now to $5tn in 2030. The increases are being driven by regulatory changes, investors’ growing comfort with the way they perform in volatile markets and creative uses of them by wealth managers and even other bond funds.”
Financial Times - February 17, 2023
I was able to access the article one time online using my DuckGo browser. Good luck. As I posted in OT, a subscription to the
Financial Times via Amazon’s Kindle service can now be had for a modest $7.99 monthly. I am a subscriber. ISTM the articles in the Kindle edition publish a day or two later than they appear online, however.
Comments
However, the FT ran another article a day or two later titled:
Bond ETFs Can Drain Liquidity During a Crisis, Study Warns
I don’t know whether the above link will work or not. I’ll say the article looks at both sides of the question. My uneducated guess is yes - as they’re easier to buy and sell than bonds held inside a mutual fund, I would guess they could more easily cause liquidity issues under certain (panic) conditions.
Bloomberg is airing a Ukraine War special. Surely they'll replay it so the rest of you can see it. 11:40 p.m. here, 5 hours behind the East.