Money manager Invesco is planning to add bond-related products to its exchange-traded funds (ETFs) offering in Europe, the company's European head of ETF development said. "This is something we are working on," Thibaud de Cherisey said at Inside ETFs Europe, the continent's biggest ETF conference. "We see a lot of demand from our customers for fixed-income-related ETFs."
Through PowerShares, Invesco is the world's sixth-largest ETF provider, with $47 billion of assets under management and 131 ETFs by the end of the first quarter, a study by global ETF market leader BlackRock showed. De Cherisey said Invesco did not want to focus on ETFs whose weighting is based on the market capitalisation of their components but on alternative methods instead, mentioning economic growth of a bond-issuing state as an example
Investor interest on such products has grown massively since the sovereign debt crisis took off in Europe as traditional bond indexes are strongly weighting highly indebted countries due to the high amount of their issued bonds. "On an index level, the next revolution will take place in the fixed-income market," de Cherisey said. Most ETFs - index funds listed on an exchange that can be traded just like regular stocks - are backed by equities. Of the total $1.4 trillion of global assets under management in the ETF industry, $1.124 trillion are equity related, with fixed-income ETFs accounting for $218 billion.
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