IIAC LETTER
Fixed Income ETF Performance and Outlook
The IIAC has launched a series of “Letters” on the major issues impacting Canada’s investment industry.
The IIAC Letter Fixed Income ETF Performance and Outlook examines how fixed income ETFs performed during the first half of 2020 and particularly through the coronavirus outbreak. The exposure of fixed income ETFs to rates and credit was explored to determine how it has affected their functioning during the crisis.
The paper determined that at the height of the volatility experienced in the markets during the COVID-19 pandemic, certain sectors of the fixed income market were of significant concern for investors. Specifically, corporate bonds, and particularly high yield bonds, saw their liquidity dry up and go no-bid in the cash market in some cases. Impressively, through this difficult period ETFs provided price discovery of underlying issues in many instances and most continued to actively trade.
For more information, please contact Todd Evans.