BlackRock Projects Global Bond ETF Assets to Reach $5 Trillion by 2030

Despite the most challenging fixed income market in decades, BlackRock projects that global bond exchange-traded funds (ETFs) assets under management (AUM) will triple to $5 trillion by 2030.¹

The extreme market volatility in the early days of the pandemic reinforced the versatility of bond ETFs. As a result, over the past two years more wealth managers have put bond ETFs at the center of their portfolios and institutional adoption of bond ETFs has broadened and deepened.

“Bond ETFs have revolutionized fixed income investing as they provide instant access at transparent prices to hundreds of bond market exposures in ways that are accessible to all investors,” said Salim Ramji, Global Head of ETF and Index Investments at BlackRock. “Bond ETFs have grown by proving to be useful and resilient investment tools during various market conditions including near-zero interest rates, pandemic-related market stresses and inflationary pressures. Bond ETFs have overcome many tests, and they have become the catalyst of a more modern, more digital and more transparent bond market.”

Driving a Third Decade of Bond ETF Growth

BlackRock pioneered bond ETFs 20 years ago and what started as four products has grown 23% annually into a $1.7 trillion industry with more than 1,400 products.² Despite this growth, bond ETFs comprise just 2% of the $124 trillion fixed income asset class.³

“The global bond ETF industry is growing faster than we expected, propelled by self-reinforcing and enduring adoption trends from our clients during the pandemic era,” said Carolyn Weinberg, Global Head of Product for ETF and Index Investments. “We believe that the next wave of growth is just beginning. While much of this growth will come from increased adoption of existing products, we are excited for the innovations that incorporate more active management – which we believe will grow five times to $1 trillion in assets by 2030.”

BlackRock’s new paper All systems go, published today, identifies four trends that we believe will help drive further adoption of bond ETFs, with details on trading dynamics, ETF usage patterns, market structure evolution, and implementation strategies of new investment concepts.

1. Building blocks in evolved 60/40 portfolios: Bond ETFs’ market share in the fund industry is 24% compared to 14% five years ago as more investors are blending bond ETFs with active strategies, moving from one type of fixed income exposure to another, reframing the traditional 60/40 portfolio and bond construction in the process.⁴