BlackRock Posts Big End-of-Year Gains in Bond ETFs

BlackRock Posts Big End-of-Year Gains in Bond ETFs

Asset manager drew in a record $120 billion in fixed income assets so far this year.

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Reviewed by: Zoya Mirza
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Edited by: Zoya Mirza

BlackRock Inc., whose iShares unit is the world’s largest exchange-traded funds issuer, said inflows into fixed income ETFs have soared 50% to $120 billion so far this year--even as the bond market stumbled. 

New York-based BlackRock topped rivals Vanguard Group Inc. and State Street Corp., which took in $51 billion and $21 billion in fixed income assets so far in 2022, respectively, whereas BlackRock’s fixed income ETFs brought in $100 billion in the U.S. alone, according to Bloomberg Intelligence data. 

The asset manager, which has $8 trillion in global assets under management, saw increasing inflows despite 2022 being one of the worst fixed income markets in years. 

Bond ETFs have become a popular choice for investors—especially those looking to diversify their portfolios—offering a source of steady income and relatively low volatility. 

“The role of bonds in a portfolio is more relevant today, with bond yields rising to the highest levels in over a decade in 2022,” BlackRock’s Global Head of ETF and Index Investments Salim Ramji wrote in the firm’s annual investor progress report. “The variety and liquidity of bond ETFs are making it easier for investors to build income-seeking portfolios.” 

This year’s flows were a big jump from 2021 which brought the New-York based asset manager $80 billion in fixed income ETFs globally. In fact, BlackRock accounted for eight out of the 10 most heavily traded fixed income ETFs in the U.S. in 2022, according to the report.  

Top- performing funds include the iShares iBoxx USD High Yield Corporate Bond ETF (HYG), the iShares 20+ Year Treasury Bond ETF (TLT) and the iShares iBoxx USD Investment Grade Corporate Bond ETF (LQD), which posted returns of 3.28%, 1.28% and 3.31%, respectively, over the course of the past three months, according to ETF.com data.  

Ramji, who authored the report, also noted that though bond ETFs only make up 2% of the global fixed income market right now with 1.7% trillion in assets, BlackRock anticipates the figure to grow to $5 trillion by 2030. 

 

Contact Zoya Mirza at [email protected] 

 

Zoya Mirza is a markets reporter at etf.com. Her work has appeared in USA Today, Voice of America, and United Press International, among others. Mirza is a graduate of Northwestern University’s Medill School of Journalism. Her past experiences include editorial work in book publishing and conducting political analysis for NGOs and think tanks. Mirza is a passionate bibliophile and collects vintage postcards from every bookstore she visits in a new city.