(New York)

One of the biggest surprises in the rise of ETFs has been the dominance of stocks over bonds. Bonds have always had some liquidity challenges for individual investors, so at the outset one would have expected bond ETFs to do well since they greatly enhanced accessibility to the asset class. However, while stock ETFs have exploded, bond ETFs have been more of a steady progression, but things are heating up. Bonds represent 15% of the total ETF market, but are growing quickly, with the market size doubling to $1.5 tn by 2022.

FINSUM: We think bond ETF demand will rise in line with rates. Once people start seeing 5% yields plus on solid bonds with short durations we think there will be more and more buying.