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As the eventful first chapter of the year closes, many institutional and individual investors seek to reshuffle their assets as part of their quarterly strategy update and rebalancing. Fixed income, a major asset class that has become investable through exchange-traded funds since 2002 – has grown in popularity due to the simplicity of the investment vehicle. Each week, we track the fund flows of over 2,000 Fixed Income ETFs available for investors globally.

Between March 28th and April 1st, 2022, Fixed Income ETFs lured in over $7.8 billion in net inflows and roughly $37.3 billion overall this year. America-domiciled Fixed Income ETFs had the lion's share – receiving $6.11 billion of the total net inflows, more than double the previous week's amount ($2.98 billion). Meanwhile, Europe-domiciled Fixed Income ETFs netted $1.51 billion last week, after attracting $1.17 billion in the prior week.

America's Fixed Income ETFs top fund action

Among the top inflows receivers last week were Vanguard Total Bond Market ETF (BND, $2,462 million), Schwab Intermediate-Term U.S. Treasury ETF (SCHR, $808 million), SPDR Bloomberg High Yield Bond ETF (JNK, $739 million), iShares Broad USD Investment Grade Corporate Bond ETF (USIG, $614 million), and iShares Short Treasury Bond ETF (SHV, $547 million).

BND, the largest recipient, seeks to track Bloomberg U.S. Aggregate Float Adjusted Index and invests in taxable investment-grade U.S. dollar-denominated bond market, excluding inflation-protected and tax-exempt bonds. As of February 28th, 2022, the fund has an average effective maturity of 8.9 years, average duration of 6.8 years, a yield to maturity of 2.3%, and an average coupon of 2.6%. In terms of credit quality, roughly two-thirds of the portfolio is composed of U.S. Government bonds, the rest is BBB rated (14.9%), A-rated (11.8%), AAA-rated (3.7%), and AA-rated (3.7%).

BND has a total expense ratio of 0.035% and trades primarily on the NYSE.

On the other side of the fund flows spectrum, Vanguard Short-Term Bond ETF (BSV,-$1,276 million), iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB, -$672 million), JPMorgan High Yield Research Enhanced ETF (JPHY, -$576 million), iShares iBoxx $ Investment Grade Corporate Bond ETF ( LQD, -$506 million), and iShares 3-7 Year Treasury Bond ETF (IEI, -$413 million) were among the biggest flow bleeders last week.

BSV, the biggest flow bleeder last week, seeks to track the Bloomberg U.S. 1–5 Year Government/Credit Float Adjusted Index and invests in investment-grade bonds with a dollar-weighted average maturity of 1 to 5 years, including U.S. government, high-quality (investment-grade) corporate, and investment-grade international dollar-denominated bonds.

As of February 28th, 2022, the fund has an average effective maturity of 2.9 years, average duration of 2.7 years, a yield to maturity of 1.8%, and an average coupon of 1.9%. More than two-thirds of the portfolio is composed of U.S. Government bonds. The rest is BBB rated (12.2%), A-rated (12.2%), AAA-rated (4.3%), and AA-rated (2.9%).

BSV has a total expense ratio of 0.05% and trades primarily on the NYSE.

Europe's Fixed Income ETFs top fund action

Among last week's most popular Fixed Income ETFs in Europe were iShares J.P. Morgan $ EM Bond UCITS ETF (JPEA, $561 million), iShares € Ultrashort Bond UCITS ETF (ERNE, $264 million), iShares J.P. Morgan ESG $ EM Bond UCITS ETF (EMSA, $244 million), iShares Core € Corp Bond UCITS ETF (IEAC, $225 million), and iShares J.P. Morgan $ EM Bond EUR Hedged UCITS ETF (EMBE, $122 million).

The top recipient JPEA seeks to track the J.P. Morgan EMBI Global Core Index and invests in emerging market bonds issued in US Dollars, including investment grade and high yield bonds.

In terms of country exposure (as of April 1st, 2022), Mexico, Indonesia, Saudi Arabia, the United Arab Emirates, Qatar, and Turkey have among the highest exposure (4-6% each). As for credit quality, 27.8% of the underlying bonds are BBB rated, 21.7% B rated, 21.2% BB-rated, 15.56% A-rated, and 8.1% AA-rated. JPEA has a weighted average coupon rate of 4.76% and a weighted average maturity of 13.3 years.

The fund has a total expense ratio of 0.45% and trades on multiple European exchanges such as the London Stock Exchange (JPEA, USD or JPEE, EUR), the SIX Swiss Exchange (JPEA, CHF), and the Deutsche Boerse Xetra (ISO2, EUR).

Among the least popular last week were iShares $ Treasury Bond 1-3yr UCITS ETF (IBTA, -$268 million), iShares J.P. Morgan EM Local Govt Bond UCITS ETF (SEML, -$143 million), Lyxor Smart Overnight Return - UCITS ETF (SMART, -$121 million).

IBTA seeks to track the ICE US Treasury 1-3 Year Index and invests in US Dollar-denominated government bonds issued by the US Treasury (AAA rated). As of April 1st, 2022, the fund has a weighted average coupon of 1.47% and a weighted average maturity of 1.97 years.

The fund has a total expense ratio of 0.07% and trades on multiple exchanges, including the London Stock Exchange (IBTA, USD) and the SIX Swiss Exchange (IBTA, CHF).