PDF James Bianco Fixed Income ETFs - Opportunities and Challenges

[Pages:35]James Bianco

Fixed Income ETFs Opportunities and Challenges

Toronto CFA Presentation Package March 4, 2019

? ETF assets = $3.8 trillion, 80% are equity ETFs ? The two largest each account for roughly one-third of inflows ? 23% of bond fund flows since June 2010 have gone into the five largest bond

ETFs ? Who buys ETFs? Wealth managers ? The 60/40 portfolio is the driving allocation in ETF land ? The ETF war is driven by wealth managers ? The stock/bond relationship has become more unstable ? High yield ETFs continue to be used as a hedging vehicle

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88% of RIA's listed ETFs as the most popular financial instrument they would recommend to their clients. Since they have 36 million clients in an asset allocated portfolio, the next chart should come as no surprise. It shows ownership in the ETF market.

A 2017 Deutsche Bank study found half of all ETFs were owned by accounts directed by investment advisers (blue) or private banking/wealth managers (orange). 41% of ETFs are owned by individuals directly (brown).

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