Fixed income ETPs now account for 18% of global ETP assets, up from 7% in 2007 at the onset of the financial crisis, according to BlackRock. Bond ETPs garnered a 35% share of industry flows in the first seven months of 2012, according to a BlackRock report on the fixed income ETP landscape.
Global fixed income ETP assets have grown to $309 billion, and fixed income inflows of $44.4 billion for the first seven months of this year came in 94% above the same period last year, the report said.
While all segments of the ETP fixed income market have grown, recent growth has been most prominent in investment grade corporate, high yield and emerging markets, which are all focused on higher-yielding segments of the bond market, the BlackRock report said.
Actively managed bond ETPs are relative newcomers to the market and are beginning to gain traction, now accounting for just under $6 billion in assets out of a total of $309 billion in fixed income ETP assets, the report said.
The US market accounts for the majority of fixed income ETP assets, while Canada is the fastest growing market, albeit on a much smaller asset base, BlackRock said. The debt crisis has taken a toll on growth of the ETP bond market in Europe, which shrunk $0.7 billion over the last 12 months ended July 2012.
Looking at the market share of ETP providers, BlackRock found that in July 2012, iShares was the largest global fixed income provider with 59% AUM market share followed by Vanguard with 14% and State Street with 9%.
Collectively, the top three providers account for 81% of global fixed income ETP AUM and the top ten account for 94%, the report said. Other providers in the top 10 include db x-trackers; PowerShares; PIMCO; Lyxor Asset Management; ProShares; ETFlab Investment and BMO Asset Management.