Wednesday, 16 November 2022 05:26

ETFs flexing muscle

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Perhaps you’ve heard: inflation seems to have an insatiable appetite and the short term outlook in fixed income are being dominated by interest rates spikes by the central bank, according to ssga.com.

Ah, but there is a life preserver: longer term, structural factors are having more than a little sway in how  investors implement and oversee fixed income allocations.

'Did someone say life preserver’, grumbled the Skip from Gilligan’s Island?

‘Fraid so, dude.

And you want to know the punch that ETFs are packing in in the evolving landscape of fixed income? Well, consider ssga’s new global study, which surveyed 700 institutional investors and investment decision makers.

One key finding: there was a growth from assets under management from $574 billion in 2017 to $1.28 trillion in 2021, according to data recorded by the New York Stock Exchange. What’s more, the number of funds also accelerated like no one’s business over the same period – from 278 to almost 500.

As for non core sectors? The role of ETFs in asset allocation is propelling, according to its survey this year.

According to the report, 62% of investors who are ratcheting up their exposure to high yield corporate credit over the next 12 months indicated the chances are high they’ll leverage ETFs to do it. Ditto for 53% in terms of emerging market debt, according to pionline.com.

"Our 2022 survey shows that the role of ETFs in asset allocation is expanding to non-core sectors," said the report, "The Role of ETFs in a New Fixed Income Landscape." 

 

 

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