And the second is the need for income as interest rates remain at or near all-time lows. The first is a need for diversification through an allocation to higher quality bonds. We see clients really turning to fixed income to solve two key challenges in their overall portfolios. What ETF investment trends are you focused on? And the last driver is constant ETF innovation, specifically in important areas like ESG solutions. And the third driver has been the modernization of the bond market more generally. The second is the evolution in portfolio construction, where investors are moving beyond the traditional active versus passive debate and utilizing ETFs as transparent building blocks in their portfolio construction process. The first has been growing adoption by institutional investors. And specifically, there are really four drivers that we think have been driving the usage of fixed income ETFs. In fact, we believe that global industry assets will double by 2024 to reach US$2 trillion as different types of investors from individual users, to wealth managers, to institutions use ETFs in more and different ways. So we believe there’s still a lot of opportunity for continued growth. And while that is a tremendous number, it actually represents less than one percent of global fixed income market cap. Since the first fixed income ETF was launched almost two decades ago, we’ve seen global industry assets cross US$1 trillion in assets under management. What’s driving the growth of global fixed income ETFs? And lastly, in today’s low-yield environment, many investors are looking for alternatives to cash or cash alternatives that can help them earn a little bit more and are turning that cash into fixed income shorter-duration solutions. And for investors who are looking to generate a certain level of income, an exposure to credit such as investment grade corporates, high-yield or emerging-market debt can help achieve that objective. For example, a core allocation to higher quality fixed income can add stability to an investor’s equity allocation, providing balance during periods of market stress. Whether it’s to help diversify against equities, to pursue income or to put your cash to work. We believe that even as global central banks – including the Bank of Canada –anchor policy rates near zero that fixed income remains a critical part of any investor’s portfolio. With interest rates near all-time lows, the role of fixed income is certainly a question that is top of mind for many investors today. What role does fixed income play in diversifying a portfolio?
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