Bringing you live news and features since 2006 

Tabula research predicts huge increase in fixed income ETFs over the next three years


New research conducted by fixed income ETF provider Tabula amongst institutional investors and wealth managers suggests there will be a huge increase in the number of fixed income ETFs launched in Europe over the next three years.

There are currently around 400 fixed income ETFs listed in Europe, the firm says.  However, the survey, reveals 64 per cent of those interviewed anticipate there will be 500 or more by 2020. Some 17 per cent believe the number will be between 750 and 1,000 and 9 per cent anticipate there will be over 1,000 fixed income ETFs listed in Europe by 2020.
Tabula claims that this could result in a large number of ‘copy-cat’ fixed income ETFs launched, all offering much the same investment propositions.  The firm is calling for a greater focus on innovation in order to address the needs of fixed income investors.
In terms of ETF asset growth, Tabula’s research reveals just over half (53 per cent) of those interviewed expect the amount invested globally in fixed income ETFs to reach USD1.6 trillion by the end of 2020 – a rise of 167 per cent on 2016.
In terms of what the biggest drivers are behind this growth, 67 per cent of institutional investors and wealth managers say low cost, followed by 52 per cent who say it’s the ease of access they provide to markets.  One in four (24 per cent) say it’s the transparency and intra-day access that they offer.
The findings also reveal that fixed income ETFs will take a bigger share of overall flows into the wider ETF market.  Currently, around 23 per cent of assets invested in ETFs track fixed income exposure.  Last year fixed income ETFs accounted for 26 per cent of overall flows into the sector.  43 per cent of those interviewed expect flows to be 30 per cent or more by 2020, and only 22 per cent think it will be below last year’s levels.
Michael John (‘MJ’) Lytle (pictured), Chief Executive, Tabula Investment Management says: “There is a strong belief among professional investors that demand for fixed income ETFs will increase dramatically over the next few years.  This is likely to lead to a significant expansion in the number of products that are launched. I am concerned that a lack of innovation will mean that many of these products will offer very similar exposure to those that already exist. The palpable opportunity in this market lies in developing new products that deliver precise exposure and address the specific needs of fixed income investors. We are aiming to tackle these issues when we launch our first products.”

Latest News

Matteo Greco, Research Analyst at Fineqia International, writes that bitcoin (BTC) ended last week at approximately USD60,800, marking an 8.8..
Amundi reports that in the first six months of the year, European UCITS ETF inflows reached a record high of..
Morningstar has released its European ETF asset flow update for Q2 2024 which shows that the European ETF and ETC..
ETF issuer WisdomTree has announced that it has partnered with commission-free investing app Trading 212 to offer six ETF model..

Related Articles

Chris Lo, Columbia Threadneedle
In a recent insight on India by Columbia Threadneedle Investments, the firm reports that the country’s economic reforms, which aim...
With an election on the horizon in the United States a group of ETFs is poised to capture investments on...
Robot worker
Qraft Technologies, based in South Korea, specialises in the use of AI in security selection and portfolio construction....
Andrea Busi, Directa SIM
Romain Thomas talks to Andrea Busi (pictured), CEO of Directa SIM, who explains why the online trading platform has just...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by