ETFs let investors gain exposure to a sector using a single security. The cash instruments track an index or replicate the performance of a basket of stocks or bonds, and are traded on an exchange like a regular share. The expansion of the ETF universe into the bond market increases indexing opportunities to include bonds of different maturities and credit quality.
The first fixed-income ETF in Europe, the eb.rexx Government Germany EX, was launched by Deutsche Börse in February. In March, it was followed by the iBoxx €Liquid Corporates ETF with a focus on corporate bonds. According to the bourse, these two ETFs had approximately €870 million in assets under management at the end of May.