Industry Updates

Bond ETFs see huge inflows, except in Britain

David Tuckwell

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.


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