(Bloomberg) -- Holdings in bond ETFs climbed to records in the U.S. and Europe, spurred by ease of trading and the lure of higher yields in emerging markets.
Bond ETFs now manage $428 billion in the U.S. and $150 billion in Europe, according to BlackRock. The iShares Core U.S. Aggregate Bond ETF also became the first fixed-income ETF to surpass $40 billion in assets, the New York-based investment company said.
Globally, bond ETFs have had the fastest growth since 2012, with $99.7 billion of inflows, helped by record emerging-market investments and central-bank purchases driving up bond demand in Europe.
Punished by the plunge in the energy sector, some advisers await a rebound that can take advantage of master limited partnerships’ tax status.
The funds, which track debt indexes and trade like stocks, have also gained popularity as investors seek liquid investments amid a slowdown in bond-market trading.
European Central Bank President Mario Draghi’s corporate-bond buying program fostered ETF investments in the region, with BlackRock’s five largest European corporate-debt funds receiving $1.9 billion of inflows last quarter.
Industrywide, investors poured a record $5.8 billion into funds focused on emerging-market bonds last quarter, BlackRock said. That boosted the year-to-date tally to $12.7 billion, compared with 2012’s full-year record of $8.3 billion.
