Bond wave boosts fixed-income ETF issuance

Local currency fixed-income ETFs have been in short supply – and low demand in Asia. But a combination of strong growth in domestic bond issuance and improving sovereign credit ratings may see this trend reverse

The global exchange-traded fund (ETF) market has gravitated towards equity underlying as investors use these products to gain exposure to markets that do not allow foreign investors access and it has further benefited from the liquidity and deep trading in both the derivative and the underlying shares.

Fixed-income ETFs, however, have had a limited but increasingly important role to play in managing investor exposure to debt markets – and developing these markets. Data by the Asian Development