Tabula : Investors highlight fixed income frustrations and appetite for innovation…
Michael John Lytle Tabula CEO
Finding new sources of return that are structural and uncorrelated is a priority for around 85% of wealth managers and institutional investors, according to new research from fixed income ETF provider Tabula Investment Management (1).
This partly explains why 51% of professional investors surveyed expect to see the level of smart beta and innovation being used in the fixed income ETF sector increasing over the next three years, with only 2% expecting it to decrease.
The investors also expect to see a rise in allocations being made to ESG strategies.
Over half (54%) expect an increase here over the next three years.
Only 5% think flows to ESG strategies will fall.
ETFs are increasingly being used for both smart beta and ESG specific strategies, which helps explain why they are growing in popularity.
However, as well as investors using them, Tabula’s research also found that the average ticket size in ETF trades will increase. One in five anticipate this, with none of the investors polled expecting it to fall.
“Fixed income ETFs not only provide easy and cost-efficient access to standard bond indices, they can also deliver new and innovative investment opportunities- this is at the centre of what we do at Tabula,” says Tabula CEO Michael John Lytle.
Tabula’s current offering includes investment grade performance funds, tools for both long and short high yield strategies, as well as the first credit volatility premia ETF (TVOL).
(1) Tabula Investment Management commissioned the market research company PollRight to interview 67 professional investors during June and July 2019.