Bond ETFs are off to a great start in 2017, and remain a crucial part of any portfolio. Investors are not scared off by interest rate hikes, even with several more planned for the rest of the year.
Equity ETFs fared much better than their active counterparts in 2016 gathering inflows just as active funds suffered withdrawals. The volatility caused by political events in the UK and US could be partly to blame, as Lipper believes investors are opting for shorter-term plays on the stock market.
ETFs globally have seen record inflows this year, with investors pouring money into equity, fixed income and smart beta alike, but investors and regulators are now worried these vehicles could become the source of increased volatility in current uncertain markets.