AUM Increased by 30% in the Last 12 Months
Global fixed income exchange-traded funds (ETFs) grew 30% in the
past twelve months, driven by increased investor appetite for
liquid, transparent, and efficient access to the bond market. 1
Fixed income ETF assets under management (AUM) ended June at a
record $1.3 trillion. Most of this growth (84%) came from inflows:
iShares alone added $105 billion, evenly split between the second
half of 2019 and the first half of 2020.2
Record inflows in the most recent quarter – including $57
billion into iShares – show that bond investors are increasingly
using ETFs to rapidly reposition portfolios in light of changing
market conditions, price individual bonds and portfolios, reduce
transaction costs, manage liquidity, and hedge risk.3 Institutional
clients—from pensions funds to active managers— that recognized the
versatility of fixed income ETFs, accelerated their adoption of
ETFs. Globally, BlackRock counted over 60 pension funds, insurers,
and asset managers that were first time buyers of iShares fixed
income ETFs, which collectively added about $10 billion in
assets.4
“The versatility and resilience of the largest and most heavily
traded fixed income ETFs, especially through market stresses this
year, have made them more central to the construction of
institutional investors’ portfolios,” said Salim Ramji, Global
Head of iShares and Index Investments at BlackRock.
“Accelerated institutional adoption is further recognition that
ETFs are modernizing the bond markets by increasing overall
transparency, improving liquidity, and lowering trading costs.”
BlackRock Affirms Global Fixed Income ETF Assets Will
Reach $2 Trillion by 2024
Eighteen years ago, iShares pioneered fixed income ETFs with the
launch of iShares iBoxx $ Investment Grade Corporate Bond ETF
(NYSE:LQD). Since its inception, the industry has grown to 1,690
fixed income ETFs and $1.3 trillion in assets. Even so, ETFs still
represent only about 1% of the $100 trillion global fixed income
securities market.5 Bolstered by recent adoption patterns,
BlackRock believes that institutional investors will help expand
global fixed income ETF assets to $2 trillion by 2024.
“Fixed Income ETFs helped the credit markets operate better
during times of market stress, including the unprecedented turmoil
seen earlier this year,” said Carolyn Weinberg, Global Head of
iShares Product at BlackRock. “These ETFs contributed
significantly to the financial ecosystem by providing additional
liquidity and price discovery, relieving pressure from the
underlying bond markets at a time when that was required.”
Simplified Processes, Improved Outcomes
Today, BlackRock published new research illustrating how fixed
income ETFs performed during the first half of 2020, with details
on ETF usage patterns, liquidity dynamics, and transaction costs
under extreme market stress. Case studies from insurance companies,
pension funds, and asset managers around the world, including first
time buyers of fixed income ETFs, highlight the central role these
funds played as part of the overall bond market exposures
toolkit.
For information click here.
About BlackRock
BlackRock’s purpose is to help more and more people experience
financial well-being. As a fiduciary to investors and a leading
provider of financial technology, our clients turn to us for the
solutions they need when planning for their most important goals.
As of March 31, 2020, the firm managed approximately $6.47 trillion
in assets on behalf of investors worldwide. For additional
information on BlackRock, please visit www.blackrock.com/corporate
| Twitter: @blackrock | Blog: www.blackrockblog.com | LinkedIn:
www.linkedin.com/company/blackrock .
About iShares
iShares unlocks opportunity across markets to meet the evolving
needs of investors. With more than 20 years of experience, a global
line-up of 900+ exchange traded funds (ETFs) and $1.85 trillion in
assets under management as of March 31, 2020, iShares continues to
drive progress for the financial industry. iShares funds are
powered by the expert portfolio and risk management of BlackRock,
trusted to manage more money than any other investment firm.
- BlackRock. For 2018, flows are from 01/01/2018 to 12/31/2018
and for 2020, flows are from 01/01/2020 to 06/30/20.
Carefully consider the Funds' investment objectives, risk
factors, and charges and expenses before investing. This and other
information can be found in the Funds' prospectuses or, if
available, the summary prospectuses which may be obtained by
visiting www.iShares.com or www.blackrock.com. Read the prospectus
carefully before investing.
Investing involves risk, including possible loss of
principal.
Fixed income risks include interest-rate and credit risk.
Typically, when interest rates rise, there is a corresponding
decline in bond values. Credit risk refers to the possibility that
the bond issuer will not be able to make principal and interest
payments. Diversification and asset allocation may not protect
against market risk or loss of principal. Buying and selling shares
of ETFs may result in brokerage commissions.
This material represents an assessment of the market environment
as of the date indicated and should not be relied upon as research,
investment advice, or a recommendation regarding any products,
strategies, or any security in particular. This material is
strictly for illustrative, educational, or informational purposes
and is subject to change. The information provided here may not be
representative of the experiences of other individuals and does not
guarantee future performance.
Shares of iShares ETFs may be bought and sold throughout the day
on the exchange through any brokerage account. Shares are not
individually redeemable from the ETF, however, shares may be
redeemed directly from an ETF by Authorized Participants, in very
large creation/redemption units. There can be no assurance that an
active trading market for shares of an ETF will develop or be
maintained.
The iShares Funds are distributed by BlackRock Investments, LLC
(together with its affiliates, “BlackRock”).
The iShares Funds are not sponsored, endorsed, issued, sold or
promoted by Markit Indices Limited, nor does this company make any
representation regarding the advisability of investing in the
Funds. BlackRock is not affiliated with Markit Indices Limited.
©2020 BlackRock, Inc. iSHARES and BLACKROCK are
trademarks of BlackRock, Inc., or its subsidiaries in the United
States and elsewhere. All other marks are the property of their
respective owners.
1 BlackRock, 12 months ending June 30, 2020
2 BlackRock, as of June 30, 2020
3 BlackRock, as of June 30, 2020
4 BlackRock, as of June 30, 2020; estimate is based on client
interactions in and is not intended to be comprehensive.
5 ETF count and AUM: BlackRock, June 30, 2020; Market size:
BlackRock, Markit, SIFMA, as of December 2019
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version on businesswire.com: https://www.businesswire.com/news/home/20200715005546/en/
Media Contact: Soogyung Jordan
soogyung.jordan@blackrock.com 646.276.5403
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