Bond ETFs are gaining momentum among investors and seeing strong inflows everywhere except the UK.
According to research company TrackInsight, total inflows into bond ETFs sit at €31bn this year, with particularly strong growth in developed markets.
While British bonds have seen withdrawals recently, only an annualised basis British bonds have seen €5bn.
What's driving the growth?
One reason may be the growing number of products on offer, although it is unclear which is cause and which is effect. Another may be smart-beta ETFs which have opened new horizons in passive management.
But one reason is clear: bond ETFs are cheaper than actively managed bond portfolios. Some ETFs cost as little as 0.14 percent per annum. And everyone loves a bargain.
