09/02/2012
By Adam Cadle
Investors are increasingly looking to utilise fixed income exchange traded funds (ETFs) and exchange traded products (ETPs) to boost investment returns and combat sustained levels of low yield, according to new findings from BlackRock’s Investment Institute.
In its ETP Landscape Industry Summary report, the company highlighted that the ETP industry experienced net inflows of $34.1bn, a 116 per cent increase from December 2011. In addition, fixed income ETPs attracted $9bn in January, setting a new global monthly record. Fixed income ETFs captured $9bn of the $9.1bn net new ETP assets in January 2012.
BlackRock’s fixed income portfolio management senior managing director and head Peter Fisher said: “In this challenging environment with sustained levels of low yield, now more than ever investors are looking for new ways to generate income.
“We see a quiet revolution building in the asset class as more and more investors learn how to use fixed income ETFs to build portfolios that combine low risk with the potential for yield.”
This view was supported by iShares fixed income investment strategy head Matt Tucker, who stated that after the first fixed income ETF was created nearly 10 years ago investors are gradually starting to realise that passive fixed income ETFs have become absolutely essential in the building of an efficient and healthy portfolio.
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Exchange traded products (ETPs) have seen €41bn of net inflows over the last year, with particular demand for broad-based European funds, commodity and fixed income funds
