Behind the Ticker: BTOT & BlackRock

In this episode of Behind the Ticker, host Brad Roth, CIO of Thor Financial Technologies, talks Steve Laipply, Managing Director, Global Co-Head of iShares Fixed Income ETFs at BlackRock, about the iShares Total USD Fixed Income Market ETF (BTOT). Their discussion covers the benefits and valuable role that fixed income ETFs play in markets, why looking behind the Agg could prove beneficial, and more. 

You can also listen to this episode on Spotify, Apple Podcasts, or any of your preferred streaming platforms.

A More Holistic Approach to Bond Investing

Steve Laipply’s role at BlackRock puts him at the helm of roughly a trillion dollars in bond ETF assets. However, Laipply's entry into ETFs came not through a job posting but through frustration: he was trying to buy a Two-year Treasury Note in his personal brokerage account, struggling with the interface and the cost, and a colleague suggested he just buy a bond ETF. That moment led him to BGI, the predecessor to iShares under Barclay, where he joined a small team working directly with Matt Tucker. The BGI acquisition by BlackRock closed shortly after Laipply arrived, and twenty-plus years later, he's still there.

One of the more distinctive intellectual contributions Laipply has made over his career is a body of research arguing that bond ETF prices function as leading indicators during market stress and that that the exchange-traded price of a fund like the iShares iBoxx USD Investment Grade Corporate Bond ETF (LQD) tells you something meaningful before the underlying bond market catches up. His evidence comes from the spring of 2020, when investment grade credit was seizing up. LQD was trading 90,000 to 100,000 times per day on exchange, while the top holdings in the fund were trading maybe a dozen times in the OTC market. The exchange price, driven by that volume and real-time price discovery, led the NAV and eventually the two converged. Laipply's argument is that this price leadership during stress is a structural feature of the product, not an anomaly, and it's one of the reasons he remains convinced that the ETF wrapper does something genuinely valuable for fixed income that the underlying OTC market cannot replicate.

The iShares Total USD Fixed Income Market ETF (BTOT) launched in December 2025 and is the bond market equivalent of a concept that already existed on the equity side: a single ticker that owns the entire market. The question that prompted BTOT was simply: why doesn't that exist for bonds? The Agg was built in the early 1970's around treasuries, then expanded to include credit and mortgages, but large and important segments of the market like bank loans, floating rate, inflation-protected securities, high yield, and emerging markets, were never fully integrated.

BTOT solves for that by broadening the circles of coverage, as Laipply describes it: the Agg is the core, BlackRock’s Universal Index adds some high yield and EM, and BTOT expands further to include TIPS, investment grade floaters, bank loans, high yield, and emerging markets debt. The result is a universe roughly 20% larger than the AG and 10% larger than the Universal, with a yield currently around 4.57%. It’s important to note that BTOT is not meant as a replacement for the Agg so much as an evolution beyond it. BTOT adds the parts of the bond market that have grown significantly but aren't in the Agg. The inclusion of these segments isn't about taking on dramatically more risk but about owning the actual bond market rather than a curated subset of it.

For those wondering why extend duration into something like BTOT when money markets are still yielding in the high threes after fees, with zero duration risk, Laipply provides a two-fold answer. First, you cannot time the market: by the time it's obvious that yields have peaked and you should be extending, it's already too late. Second, money markets are a limited tool in a range of scenarios: they don't protect against repricing in credit or treasuries, and they provide no real defense against a sharp economic slowdown or an inflationary environment that doesn't follow the script. 

The conversation closes on the importance of staying intellectually curious and the new developments in the digital space that Laipply is watching and learning about because of their eventual future impact on bonds, like tokenization. 

Advisors and investors wanting to know more can go to both the BlackRock and iShares websites. 

Disclaimer: The market insights, projections, and investment strategies expressed in this article are solely those of the contributor and do not necessarily reflect the views or opinions of ETF.com. This content is provided for informational purposes only and does not constitute financial, investment, or legal advice.