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When to use Bond ETFs?

Why and How Institutional Investors are Using Bond ETFs

Research from Greenwich Associates shows that bond ETFs are being used for a variety of purposes by institutional investors; some are using bond ETFs to gain passive, core exposure as part of a strategic asset allocation, others as using ETFs to make tactical adjustments based on short-term views. ETFs are also being used for rebalancing, transition management, and for accessing new market sectors.

Institutional investors are discovering that Bond ETFs can often be bought on a tighter spread than that of the underlying basket of cash bonds. As a result, ETFs are providing an important source of additional liquidity for bond markets.

Institutional guide to Bond ETFs (BlackRock, Oct 2017)
(For compliance reasons, this paper is only accessible in the USA)
BlackRock has just released a new "Institutional Guide", designed to familiarize institutional investors with Bond ETFs. This attractive, interactive document explains the construction, mechanics, pricing and trading mechanics of Bond ETFs. It describes common institutional applications and points investors towards further analytical tools.

Savvy Investor

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