Fund managers race to capture fixed income ETF boom

InvestorDaily

With Australian investors preparing for a world of lower interest rates, asset managers from Perpetual to Schroders are competing for a slice of the fastest-growing segment of the domestic exchange-traded fund (ETF) market: fixed income ETFs. Once the exclusive domain of large institutions, fixed income ETFs are now empowering retail investors, self-managed super funds (SMSFs), financial advisers, and institutions alike with greater accessibility, liquidity and transparency, effectively democratising a crucial asset class that was historically difficult to reach. For many, including head of Australian fixed interest at Janus Henderson, Jay Sivapalan, a key benefit of fixed income in an ETF wrapper is the enhanced accessibility and reach it offers.

“In today’s fast-moving markets, this allows investors to take tactical positions and seize potentially fleeting opportunities to reduce risk and generate additional returns,” he said. The investment firm listed its Janus Australian Fixed Interest Active ETF (JFIX) on Cboe Global Markets in February, joining Janus’ existing local product suite which already included two active fixed-interest ETFs. Sivapalan said offering fixed income options through ETFs has led to broader investor interest in the asset class.

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