Fixed income ETPs gathered $35.2 billion in net new assets globally during May, the second-largest monthly inflow for the asset class on record, according to BlackRock’s Global ETP Landscape report. Buying activity was driven by strong demand for investment-grade and high yield credit exposures.

ETFs providing exposure to fallen angel bonds appear primed for take-off as these funds have historically outperformed the broader high-yield market following a surge in downgrades. This is according to Fran Rodilosso, Portfolio Manager and Head of Fixed Income ETF Portfolio Management at VanEck. Rodilosso recently shared his perspectives with an audience of investors in a webcast hosted by VanEck and co-promoted by ETF Strategy.

Global X has introduced its first actively managed ETF with the launch of a strategic emerging markets debt fund. The Global X Emerging Markets Bond ETF (EMBD US), which is sub-advised by Mirae Asset Global Investments, has listed on NYSE Arca and comes with an expense ratio of 0.39%. Luis Berruga, CEO of Global X ETFs, commented, “With this new launch, we are seeking to combine the expertise of seasoned emerging market investors with the efficiency, transparency, and tradability of an ETF.”

ETFs providing exposure to fallen angel bonds may offer investors a significant value opportunity due to price dislocations caused by the onslaught of downgrades in the wake of Covid-19.

By Kelsey Stokes, Associate Director, Marketing, S&P Dow Jones Indices.

S&P Dow Jones Indices recently published its fifth annual analysis of ETF usage by US insurers in their general accounts. Regulatory filing data, which details the individual securities that insurers hold, showed that in 2019, ETF AUM in insurance general accounts grew to $31 billion – a 16% increase over 2018. While this headline figure shows the continued growth of ETFs in insurers’ portfolios, the trends that underlie this data are perhaps more interesting.

The Federal Reserve kicked off its buying of corporate bond ETFs on Tuesday with over $300 million in purchases. There has been much debate around the likely size and chosen targets of the Federal Reserve’s Secondary Market Corporate Credit Facility ever since the program was announced in March.

Satrix Managers has launched a new fixed income ETF in South Africa providing broad exposure to local government bonds. The Satrix SA Bond ETF (STXGOV SJ) has listed on the Johannesburg Stock Exchange and comes with an expense ratio of 0.25%.

By Kevin Horan, Director, Fixed Income Indices, S&P Dow Jones Indices.

The ETF structure has led to increased investment options within fixed income, and the African markets are a clear example of this. Over the past few years, several African ETFs have been introduced to the market, tracking indices provided by S&P Dow Jones Indices in South Africa, Nigeria, and Namibia, giving investors options to participate in this investment space.

After experiencing one of the worst quarterly performances on record, financial markets rebounded strongly in April as investors bet that the Covid-19 pandemic’s impact on the global economy will be transient. ETFs providing exposure to developed and emerging market equities, investment-grade bonds, and high-yield debt all notched up sizable gains; however, some analysts are wondering if the rally has run too far.

Financial services giant BNY Mellon has launched five new ultra-low-cost ETFs to complement the trio of funds which signaled the firm’s debut as an ETF issuer two weeks ago. The new additions include two equity ETFs tracking international developed and emerging market stocks, and three fixed income ETFs covering US aggregate, short-term corporate, and high-yield bond exposures. In line with its inaugural ETFs, the new funds are amongst the lowest-cost in their categories, with the aggregate bond ETF listed with a management fee of zero.