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FYI: ( Click On Article Title At Top Of Google Search) Institutions are piling into exchange-traded bond funds at the fastest pace on record, driven by forces reshaping the increasingly illiquid corporate-debt market and their desire to stay nimble ahead of expected interest-rate moves.
From the article: "A host of factors is behind institutions’ adoption of bond ETFs, analysts say. Among them: Deteriorating liquidity in corporate bonds has frustrated large investors as many individual bonds have become difficult to buy or sell quickly at a given price, thanks in part to rules limiting banks’ risk-taking.
U.S. corporate debt outstanding has grown by more than $2 trillion since the financial crisis to $7.7 trillion, but trading in many bonds has slowed as new rules caused dealers to pare their holdings by two-thirds from precrisis levels.
“You can’t get things done in a day anymore” in bonds, said Cliff Noreen, president at $212 billion money manager Babson Capital Management LLC, who saw an ETF sales pitch by iShares last year. “It’s more like a week.” "
Comments
U.S. corporate debt outstanding has grown by more than $2 trillion since the financial crisis to $7.7 trillion, but trading in many bonds has slowed as new rules caused dealers to pare their holdings by two-thirds from precrisis levels.
“You can’t get things done in a day anymore” in bonds, said Cliff Noreen, president at $212 billion money manager Babson Capital Management LLC, who saw an ETF sales pitch by iShares last year. “It’s more like a week.” "
In addition: hedge funds and etfs
Lastly and not knowing the affects; is that many etfs have options trading available for the etf.
Regards,
Catch