The firm said that the quality of tracking received by investors dwindled in the case of most product providers.
“There are lots of asset managers that can run simple passive equity portfolios well,” said the firm’s international products head Jo McCaffrey.
“But once you get out to other asset classes the number of people that can do it really well starts to fall away.
“There are fewer managers that can manage really high-quality beta fixed income than equity.”
There are trackers for many world bond markets but the illiquidity of fixed income can pose a technical challenge for providers attempting to design ETFs for more niche areas.
That is because low trading volumes in a particular bond on a day-to-day basis can create doubts over the right price that the tracker should attempt to replicate.
If pricing becomes uncertain then the performance delivered by trackers may vary from provider to provider.
McCaffrey said choice of markets in bond ETFs was also scant because investors mistakenly insist on buying actively managed products in certain areas.
