19. Corporate Debt Exchange-Traded Funds (ETFs)
What Are ETFs?
ETFs are investment vehicles that combine the diversification benefits of mutual funds, intraday exchange liquidity of stocks, transparency of costs and holdings, and tax efficiency. Equity ETFs have been very popular for decades as ETFs like SPY, QQQ, and IWM have become part of mainstream media with hundreds of millions of shares traded daily. Fixed-income ETFs were introduced in 2002 and have thrived in recent years as assets ballooned from $20 billion in 2007 to over $200 billion in 2013. Credit ETFs represent the largest share of growth with IG and HY ETFs accounting for ~40% of the assets in fixed-income ETFs.
One way of thinking of ETFs is as a bond asset that gives instant ...
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