EDHEC’s pointers over fixed income ETF investment

"(...) That is one of the questions posed by the findings of the recent EDHEC investor survey which suggested that fixed income was a key area where investors are demanding more diversity of products. As Lionel Martellini, professor of finance at EDHEC Business School, says “the more volatile the markets are, the more interesting it is to use low cost instruments for tactical allocation”. Of course, the greater choice afforded by ETFs has increased the more the products diverge from ‘simple’ broad market tracking. “ETFs, which originally replicated broad market indices, are now available in a wide variety of asset classes and market sub-segments and allow portfolio diversification. Investors can easily increase or decrease their portfolio exposure to a specific style, sector, or factor at lower cost with ETFs,” says Martellini. (...)"