The importance of fixed income in portfolios in today’s environment


iShares offers the widest range of fixed income funds across sectors, regions and currencies of any provider within EMEA – a UCITs range that caters to LatAm investors, alongside an extensive US range.
Read: Bond ETFs send a clear signal Read: ETFs and the ongoing coronavirus market shock

Investors are increasingly turning to bond ETFs due to:

  • Low coston average, iShares bond ETFs cost ¼ the price of fixed income active mutual funds (Source: Morningstar as of 12/31/2019 )
  • Tax efficiencyIrish-domiciled bond ETFs benefit from a flexible UCITS structure, which may have potential withholding and estate tax benefits when compared to a US-domiciled 1940 vehicle or individual bonds
  • Competitive performanceiShares bond ETFs rank in the first and second quartile of the overall Morningstar rating in 1y, 3y, 5y and 10y in many categories including Intermediate Core Bond, Core-Plus Bond, Corporate Bonds, Emerging Markets and High Yield (Source: Morningstar as of 12/31/2019)

*These stats were selected across all Morningstar categories

How can investors use iShares bond ETFs?

Why iShares for fixed income?

Biggest fixed income ETF provider
Biggest fixed income ETF provider
iShares holds $143bn in AUM out of $243bn total of fixed income UCITs ETFs globally as of 3/30/2020
Source: Bloomberg
Bond ETFs provide liquidity and transparency to bond markets
Bond ETFs provide liquidity and transparency to bond markets
LQD traded 90,000 times in a single session compared to 35 times for the most liquid IG bonds on 3/12/2020
Source: Bloomberg
Widest range of Fixed Income ETFs
Widest range of fixed income ETFs
iShares offer bond ETFs across a greater number of sectors and regions / countries than any other provider in Europe.
Source: Morningstar
A turning point for Fixed Income ETFs
How volatility in 2020 accelerated institutional adoption of fixed income ETFs.
Read the full paper Read the full paper
A turning point for Fixed Income ETFs

Why fixed income in your portfolio now?

Since 2002, Bond ETFs have weathered a variety of stressed markets. In each of these periods, we have seen:

  • Increased volumes – ETF trading volumes have tended to spike as investors turned to the exchange
  • Price discovery – Market prices of the ETFs have reflected the trading prices of the underlying bonds
  • No forced selling – When shares were redeemed, bonds have been transferred in-kind and reflected the characteristics of the portfolio

*These stats are attributable to BlackRock as of 04/2019

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