In times of troubled markets, fixed income exchange-traded funds seem to have become increasingly more attractive than cash and even traditional bonds.

“What might have happened 10 years ago is [investors] would have sold the equity and held onto cash. Or maybe bought an individual Treasury bond,” said Josh Penzner, managing director and head of the iShares fixed income distribution team. “Now, they have the opportunity to drive a different type of liquidity and exposure.”

Members of the iShares Americas Institutional Business at BlackRock team discussed the growing role of fixed income ETFs and broader ETF trends during a press briefing on Wednesday in New York. iShares, which are powered by BlackRock, currently have more than 700 funds globally across asset classes and strategies with more than $1 trillion assets under management as of Dec. 31.

“It’s not simply: I’m going to own this or I have to own cash,” Penzner said. “You have the ability to really build a portfolio, drive the solution, think about the asset allocation – more than simply ‘own and sell,’ ‘own and sell,’ which would have been 10 years ago or maybe even just five years ago.”

According to a new report, Institutional Investment in ETFs: Versatility Fuels Growth, from Greenwich Associates and sponsored by BlackRock, institutions are increasingly using ETFs as cost-effective replacements for bonds and derivatives.

The report finds that 65% of institutional ETF users employ the funds in fixed income.

The growing institutionalization of fixed-income ETFs – using multiple fixed-income ETFs to solve complex problems – has been “really, really profound in the shift we’re seeing in the industry,” Penzner said.

The report is based on interviews with 183 U.S. institutional investors – including 41 asset managers, 51 institutional funds (pensions, endowments and foundations), 47 RIAs, 24 insurance companies and 20 investment consultants – between August and November 2015.

As the report states, “liquidity levels in traditional fixed income markets have declined over the past several years, creating serious portfolio challenges for investors.”

It’s these liquidity issues that have led many institutions to adopt fixed income ETFs, according to the report.

While liquidity in traditional fixed income was declining, ETF liquidity increased dramatically over the same period.

According to the report, institutions name liquidity as an important reason for investing in bond ETFs in 2015.

(For more on the study, check out 5 Ways Big Investors Are Driving ETF Growth.)

It is one of iShares goals this year to increase the adoption of fixed income ETFs among institutional bond buyers.

In 2015, iShares saw “tremendous” growth within its fixed-income ETFs.

Fixed income was one of the major drivers of iShares’ $130 billion in overall new flows in 2015 – a 13% organic growth rate. iShares’ fixed income ETFs saw a 21% organic growth rate and nearly $31 billion of new flows in 2015.

According to Penzner, 47 new bond buyers purchased iShares ETFs for the first time in 2015.

“The strategic opportunity in this space, as you’ve heard and seen in the market over the last not just years but certainly over the last few months – December highlighting that – is tremendous,” Penzner said. “It reflects the change that we’re seeing in the way that investors look at their portfolio and the way broker-dealers manage their balance sheets, and the overall focus on how to build alpha, how to manage risk, how to build diversification. You can really see that in U.S. Fixed Income iShares performance.”

Looking year-to-date ETF flows, that trend seems to be continuing.

Matt Tucker, managing director and head of Americas iShares fixed income strategy team, said a lot of money is going into Treasury ETFs so far this year.

“We’ve taken in more than $3 billion already in the first couple weeks of January into our Treasury iShares,” Tucker said. “And that’s by far and away the most we’ve closed in any fixed income sector so far. It is very much reflective of the [current] environment.”

Tucker said it’s difficult to say if that trend will continue.

“I think if you continue to see this kind of environment, where stocks are selling off and investors de-risk, I think you’ll see more money come into treasury ETFs,” he added. “They’re the least risky investment out there.”

ETF flows, while they may be a short-term picture, are a good indicative of investor behavior, Tucker said.

“If you look at ETF flows … from that you can see where investors are putting their money,” Tucker said. “That’s a really powerful tool just for investors. If I want to find out what’s happening in the market in real time I can look at ETF price movements, I can look at ETF flows and actually tell the story about investor behavior.”

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