Over the same period, the US fixed income ETF category is expected to grow to $1.4trn in assets with EMEA and Asia taking the remaining $600 billion in assets, iShares stated.
Global market growth will be driven by the impact of changing demographics as more investors seek income producing investments, the ongoing evolution of the global bond markets and the discovery of fixed income ETFs by a widening investor universe, it added.
Jennifer Grancio, head of iShares global business development at BlackRock said: “The dynamic forces driving the long-term expansion of the fixed income ETF market have been especially evident this year, with the market attracting some of its strongest asset flows to date.”
During 2012’s first half, fixed income exchange traded products (ETPs) attracted $40.8 billion in net new assets, with flows into the products accounting for 40% of all global ETP inflows.
Alex Claringbull, senior fixed income portfolio manager for iShares EMEA, said: “In today’s new world of investing, fixed income is no longer the same asset class it once was.”
He added that investors are increasingly diversifying their holdings by issuer and sector, credit quality, region and currency in an effort to secure new sources of income and to spread risk.
