What proportion of fixed income markets do ETFs represent?

Fixed income ETFs currently represent 1.8%¹ of the total outstanding global publicly traded debt market, which is in stark contrast to equity ETF's share of 9.1%¹. The gap between these two asset classes has widened in recent years as the passive industry has focused mainly on equity themes.

This deficit may narrow as the fixed income ETF offering becomes more refined and granular, following the developments and evolution seen in the equity ETF market. Overall, expect to see a move away from broad-based indices/segments into more tailored indices and strategies. The rubric ’The Analyst Insights’ in On Track magazine goes into more detail on how fixed income indices are evolving and why we see so much potential for ETFs in this space.

¹Source: ETFGI, Bloomberg, UBS Asset Management. Data as of July 2019.