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October 01, 2013 at 08:00 PM
How much of an impact are ETFs having on the bond market? A whole lot, according to a report from Fitch Ratings.
The report, titled “Bond ETFs: Rising Influence on High-Yield Markets,” says that “ETFs are playing a more significant role in U.S. fixed income markets, particularly the corporate high yield segment.”
Although U.S.corporate bond ETF assets total less than 2% of the U.S.corporate bond market, their influence on trading activity is relatively more significant. Average daily trading volumes (on a weekly basis) for the five largest high-yield corporate bond ETFs more than tripled from about $470 million in early May to more than $1.5 billion in early June.
The top U.S. listed high yield bond ETFs by assets are the iShares iBoxx $ High Yield Corporate Bond (HYG) ($14.34b), SPDR Barclays High Yield Bond (JNK) ($8.92b) and the PowerShares Senior Loan Portfolio (BKLN) ($5.31b).
