ETF Wrap: ‘They can actually derisk their portfolios’: Here’s where BlackRock is seeing iShares bond ETFs garner inflows amid climbing bond yields

by | Oct 20, 2022 | Stock Market

Hello! In this week’s ETF Wrap, I spoke with BlackRock’s U.S. head of bond ETFs, Steve Laipply, and also caught up with Invesco’s John Hoffman, the firm’s head of ETFs and indexed strategies for the Americas. Please send feedback and tips to [email protected]. You can also follow me on Twitter at @cidzelis and find me on LinkedIn.

Investors this year have been pouring capital into BlackRock’s iShares exchange-traded funds that buy U.S. Treasurys, as 2022’s climb in bond yields opens up alternatives to stocks and riskier credit.  For the first time in 15 years, almost 90% of fixed-income indexes were yielding more than 4% at the end of September, according to BlackRock. “Investors now are looking at these yield levels and making an assessment that they can actually derisk their portfolios relative to where they’ve been,” said Steve Laipply, BlackRock’s U.S. head of bond ETFs, in a phone interview.   “For many, many years, to achieve certain yield targets, investors had to take on a fair amount of risk,” said Laipply. “They probably took on more equity risk than they normally would,” while also taking on “more credit risk relative to decades past.” But bond yields have jumped in 2022 as the Federal Reserve tightens its monetary policy by raising its benchmark inter …

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