Fixed income ETF popularity grows as higher yields tempt low-cost investors

Attractive for the 'first time in years'

Investors have been drawn towards fixed income ETFs to take advantage of higher yields, with this popularity likely to continue in the UK for “cautiously-oriented” portfolios.

In the first half of 2023, fixed income ETFs in Europe saw inflows hit €31bn, surpassing the previous record of €30.6bn in 2019, according to data from Morningstar Direct. This trend has continued through the remainder of the year, with the total net assets for fixed income ETFs in Europe growing from €323.7bn in January to €355.3bn in October. Travis Spence, head of EMEA ETF distribution at JP Morgan Asset Management, said these flows can be attributed to the highest yields seen in a generation, while Rohan Reddy, director of research at Global X ETFs, said the rise of fixed income E...