ETFs face the debt challenge

The appeal of a transparent wrapper to access a market that trades predominantly over-the-counter (OTC) is clear. Corporate bond ETFs have gained traction among yield-hungry investors for this very reason. Fixed income indexation has lagged other asset classes because of market complexity, poor pricing transparency and illiquidity. Corporate bond indices are not only hostage to these flaws, but their construction methodology and weighting have also come into question. According to BlackRock figures, global fixed income ETF assets have more than doubled since 2008 to $218.4bn in Ma...