Bond ETF flows in the U.S. are up a shocking 60% relative to last year, BlackRock's global co-head of iShares fixed-income ETFs Steve Laipply told CNBC, signaling a robust and enduring hunt for income. A significant share of the flows is going into U.S. treasuries, but there has also been a significant move into multi-sector income ETFs, reflecting greater emphasis on income per unit of duration. Laipply noted that real yields reflect a growth story led by the AI boom, and with breakeven inflation rates falling very sharply, the market is sniffing out something. George Bory, chief investment strategist of fixed income at Allspring Global Investments, said the new Fed chair's lack of forward guidance is building an uncertainty premium into the market, while the front end of the curve is now very steep as the market prices in multiple rate hikes. Bory described the environment as pretty attractive for bond investors but cautioned that credit spreads are very tight, though modest inflation is a meaningful tailwind to credit worthiness.
BlackRock IncBlackRock executive highlights 60% surge in bond ETF flows, signaling strong demand for its iShares fixed-income ETFs.
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