The global market for fixed income ETFs is on target to hit $200bn next year, according to iShares.
The ETF provider says assets under management (AUM) in fixed income ETFs globally stand at $189.9 bn at present.
Asset flows into fixed income funds led the European ETF market in the first half of this year, accounting for almost 23% of all inflows.
iShares says the largest fixed income ETF in Europe is its Markit iBoxx Euro Corporate Bond, providing exposure to the largest, most liquid euro-denominated corporate bonds. The fund has $4.5bn in assets.
Emerging market bond ETFs have also seen strong interest over the last six months. Corporate and emerging market bonds have offered high yields in a generally low yield environment, allowing investors to participate in the risk premium over government bonds.
iShares says government bonds funds have still seen significant inflows. Investors have used these ETFs to manage sovereign credit risk, with strong flows into German government bond-tracking ETFs in particular.
ETFs investing in short-term government bonds, rather than those with longer-dated maturities, have also seen significant interest.
iShares says its 40 European-domiciled fixed income ETFs have surpassed $25bn in AUM, accounting for almost 50% of total assets in the European fixed income ETF market. Assets in the range have grown at a rate of 44% over the last two years.
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From 6 April 2019