Last year was a breakout for ETFs and for bond ETFs in particular. Cash flows into ETFs targeting domestic fixed income reached a record $184 billion, topping the $140 billion in inflows into ETFs focused on domestic equities. .* It was the second straight year that more new money went into domestic fixed income than U.S. equity ETFs.
In this episode, Vanguard ETF Product Manager Johnny Garcia uncovers reasons why advisors and investors are embracing the advantages of bond ETFs for building portfolios, including low cost, transparency, and tradability. He also drills into how “urban legends” about their alleged vulnerability have been wrong. (11 minutes.)
Looking ahead, part three of this three-part Vanguard Advisor’s Alpha® podcast season on ETFs explores how the Federal Reserve incorporated purchases of bond ETFs into its new COVID-inspired quantitative easing (QE) program.
*All ETF flows data referred to in this podcast season are based on Fact Set data, as of December 31, 2020.
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