Fixed-Income ETFs in Vogue: ICE

Fixed-income ETFs have amassed about $540 billion in assets under management since debuting 15 years ago. On a conference call to discuss second-quarter earnings, IntercontinentalExchange Jeff Sprecher spoke about the securities.

“I think ETFs for fixed income are popular and on the rise and it’s simply because it’s hard for you and I as individual investors to acquire and own bonds. And to the extent that you want fixed income in your retirement account or portfolio, you’re going to want some diversity of types of bonds. And what we are seeing is wealth managers are preferring to allow professionals to put those portfolios of bonds together and offer them to the market in a low-cost manner through an ETF. And so, I really do think that that’s an area on the rise.”

“It’s an area that if you are an ETF provider, you can differentiate yourselves. It’s somewhat hard to differentiate yourself if you’re simply using a broad market-based equity index because most of your competitors will offer those. In fixed income, with so many SKUs that exist in the world, you can put together different kinds of portfolios, different kinds of metrics that can differentiate you from your peers and so we see a lot of work going on there. We’re providing a lot of underlying data and analytics to ETF providers as they think about how to find niches in the market.”