As investors were drawn in by the greatest yields in decades, bond exchange-traded funds (ETFs) amassed an annual record of $300 billion in assets under management in 2023, according to BlackRock’s statement on Wednesday.
According to BlackRock, the largest asset manager in the world, bond exchange-traded funds (ETFs) are expected to be managed for $6 trillion by 2030, up from little over $2 trillion at the moment.
After BlackRock introduced the first bond ETF in 2002, it took the market 17 years to raise $1 trillion, but by July of last year, it had only taken three more years to double that amount to $2 trillion.
As central banks raised interest rates last year to control inflation, bond yields skyrocketed, making fixed income funds the most alluring option in years.
ETFs, according to investors and strategists, provide advantages over conventional mutual funds, such as daily trading and often reduced fees.
According to data, ETFs have been surpassing mutual funds in the bond market. According to ICI data, assets held by U.S. fixed-income mutual funds reached a peak of $5.6 trillion in November 2021, but by the summer of 2023, they had dropped to roughly $4.6 trillion.
