S&P Capital IQ expands analysis, ranking of bond ETFs

Criteria will include performance, credit quality, duration, yield, expense ratio

May 21, 2013 @ 11:55 am

By Jeff Benjamin

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S&P Capital IQ this week is expanding its analysis and ranking of fixed-income exchange-traded funds.

The move reflects the growing popularity of bond ETFs, according to Todd Rosenbluth, an analyst at S&P Capital IQ.

“We know that investors are choosing fixed-income ETFs, sometimes for the right reasons, and sometimes the wrong reasons,” he said. “Investors want help in comparing products.”

Including exchange-traded notes, the fixed-income exchange-traded products category has reached nearly $260 billion, or about 17% of the total $1.5 trillion exchange-traded product universe.

Of the 170 fixed-income ETFs, Mr. Rosenbluth said that half were launched in the past three years.

The first bond ETFs were launched in 2002 by iShares.

“We've seen a critical mass of fixed-income ETFs,” Mr. Rosenbluth said. “There are now 40 bond ETFs with more than $1 billion in assets.”

The ETFs will be ranked either as underweight, overweight or neutral, and coverage will begin as soon as an ETF reaches its two-month mark.

“We're not looking at past performance alone,” Mr. Rosenbluth said. “We're also looking at things like credit quality, duration, yield, and expense ratio, among other criteria.”

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