Robeco: Bond ETFs hampered by low liquidity

- Raquel Pichardo-Allison
- 30 Jul 2010

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Low liquidity levels in the fixed income markets have led investment grade and high yield exchange traded funds to rack up higher-than-expected tracking errors and lower performance, asset manager Robeco said.

In a recent report, Patrick Houweling, head of quantitative credit research at the Dutch firm, found the tracking error for high-yield ETFs ranged from 7.3% to 12%, while the highest average tracking error for investment grade ETFs reached 1.63%.

There are only three high yield ETFs in the

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