Press review
ETF Trends
"More investors, though, are beginning to invest in factor-based fixed-income strategies, especially in Europe, David Stevenson reports for the Financial Times. According to an Edhec-Risk Institute survey, Europe institutional investor exposure to government bonds rose from 13% to 66% between 2006 and 2019, while corporate bonds increased from 6% to 68% in the same period. Furthermore, about three-fifths of the institutions surveyed focused on three factors integral to the credit risk market, including carry-to-level of the yield curve, credit, and slope of the yield curve.As more consider a factor-based fixed-income approach, most studies suggest that institutions could utilize these types of bond ETFs as tactical trading tools. Meanwhile, retail investors and advisors may look to smart beta bond ETFs for yield enhancement. Currently, Edhec argued that smart beta bond ETF “usage is limited because the current offer does not correspond to their [institutional investors’]needs in terms of risk factor, and due to a lack of research in the area.”
Copyright ETF Trends
https://www.etftrends.com/fixed-income-channel/smart-beta-bond-etfs-may-be-begi…
2019
