Taxable Fixed-Income ETFs Reel in $6.27 Billion as Government and Corporate Bonds Lead the Way

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Overview

The taxable fixed-income ETF landscape, comprising 623 funds from 131 issuers with a total of $1.857 trillion in assets under management, saw a healthy influx of $6.27 billion over the past week. This inflow was primarily driven by strong demand for government and corporate bond ETFs, which attracted a combined $4.856 billion. While most categories saw positive flows, high-yield and long-term government bond ETFs experienced outflows, reflecting a degree of investor caution. On the performance front, returns were generally positive across the board, with longer-duration and inflation-protected bonds leading the charge.

Performance

This past week, taxable fixed-income ETFs delivered solid returns, with the average fund gaining 0.36%. From a credit perspective, investment-grade bonds outperformed their high-yield counterparts, with the Corporate and Core categories returning 0.36% and 0.43%, respectively, while the High Yield category was up a more modest 0.28%. This suggests that investors are currently favoring higher-quality debt.

Here are the top and bottom performing categories for the week:

  • Top 3 Performing Categories (WTD):
    • Government Long: +0.75%
    • Inflation Protected: +0.67%
    • Preferred Stock: +0.62%
  • Bottom 3 Performing Categories (WTD):
    • International: +0.04%
    • Emerging: +0.08%
    • International USD: +0.08%

Flows

The $6.27 billion of inflows into taxable fixed-income ETFs this week was heavily concentrated in a few key categories. Core and Ultrashort bond ETFs were the big winners, pulling in $1.684 billion and $1.119 billion, respectively. Corporate and Short-Term bond ETFs also saw strong demand, with inflows of $806 million and $706 million, respectively.

On the flip side, High Yield and Government Long bond ETFs were out of favor, with outflows of $1.085 billion and $580 million, respectively. This divergence in flows suggests that while investors are still seeking income, they are becoming more selective and risk-averse.

Here are the individual ETF flow leaders and laggards for the week:

  • Top ETF Inflows (5-Day):
    • Vanguard Intermediate-Term Corporate Bond ETF (VCIT): +$1.153B
    • iShares 0-3 Month Treasury Bond ETF (SGOV): +$1.056B
    • iShares Core U.S. Aggregate Bond ETF (AGG): +$563M
    • Vanguard Short-Term Corporate Bond ETF (VCSH): +$525M
    • Vanguard Total Bond Market ETF (BND): +$514M
    • iShares MBS ETF (MBB): +$505M
    • Janus Henderson AAA CLO ETF (JAAA): +$446M
    • Vanguard Total International Bond ETF (BNDX): +$315M
    • iShares 1-3 Year Treasury Bond ETF (SHY): +$314M
    • iShares 3-7 Year Treasury Bond ETF (IEI): +$249M
  • Top ETF Outflows (5-Day):
    • iShares iBoxx $ High Yield Corporate Bond ETF (HYG): -$996M
    • SPDR Bloomberg 1-3 Month T-Bill ETF (BIL): -$545M
    • iShares 7-10 Year Treasury Bond ETF (IEF): -$524M
    • iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD): -$385M
    • iShares 20+ Year Treasury Bond ETF (TLT): -$372M
    • iShares 5-10 Year Investment Grade Corporate Bond ETF (IGIB): -$147M
    • iShares TIPS Bond ETF (TIP): -$143M
    • WisdomTree Floating Rate Treasury Fund (USFR): -$120M
    • iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB): -$119M
    • iShares Convertible Bond ETF (ICVT): -$107M

Issuer League Tables

The top three issuers by AUM remain unchanged, with iShares ($714.85B), Vanguard ($495.58B), and SPDR ($159.23B) continuing to dominate the market. However, there were some notable shifts in the rankings this week. Vanguard was the top flow gatherer, with inflows of $3.440 billion, while SPDR was the biggest loser, with outflows of $565 million.

The top three issuers by 5-day flows were:

  1. Vanguard: +$3.440B
  2. JPMorgan: +$534M
  3. iShares: +$512M

The bottom three issuers by 5-day flows were:

  1. SPDR: -$565M
  2. WisdomTree: -$113M
  3. Xtrackers: -$68M

To see the full datasets, please refer to ETF Action’s Fixed Income – Taxable report center.

Disclosures

This material is for informational purposes only and should not be considered investment advice. All investments, including ETFs, involve risk, including the possible loss of principal. Investors should consider their investment objectives, risks, charges, and expenses carefully before investing.

This analysis was developed by the team at ETF Action. We leverage advanced AI tools to assist in the drafting and refinement of our content, based on our expert prompts, direction, and final review.

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