Global Bond ETF Inflows Doubled Last Month

A BlackRock report shows surge of money into fixed-income funds.

Exchange-traded fund investors doubled their bets on bonds last month to take advantage of rising yields, even as the overall amount of cash flowing into ETFs worldwide stayed about the same, according to a new report from BlackRock Inc. 

Inflows into fixed-income ETFs rose to $30 billion in October from $15.5 billion the previous month. Globally, ETFs took in $66 billion in October, little changed from the previous two months. Inflows into stock ETFs fell 36%, to $34.3 billion from $52.7 billion in September. 

The overwhelming majority—$29 billion—of fixed-income fund flows went to U.S. bond ETFs. European bond funds gained less than $1 billion, while investors pulled $3.2 billion from emerging-market debt ETFs, the largest monthly outflow since September 2022. 

The total flows were little changed from this year’s previous months, which have averaged $37 billion into stock ETFs and $26 billion into fixed income. Besides the shift from stocks to bonds, investors focused on U.S. bonds and shifted back toward longer-duration holdings. 

Bond ETF Flows

While short-term bond ETFs had more than double the inflows of longer-term ones in August and September, things shifted back in October, with long-terms pulling in $10 billion versus $13 billion for short-term. In the second quarter, long-duration bond ETFs took in several times more than short-term ones, so October’s shift may be a return to earlier patterns. 

Investors liked corporate bond funds significantly less than Treasuries. They pulled $4.6 billion from investment-grade corporate bond ETFs and $5 billion from high-yield corporate bond funds. Investment-grade U.S. corporate bond funds have lost $8 billion out of the $15 billion in inflows they gained through July. 

European investment-grade corporate bond ETFs have managed to hold on to about $8 billion out of the $10 billion they had gathered through July. 

Contact Gabe Alpert at [email protected]