Recently, at a time when traditional fixed-income products - bonds - have been sold off, fixed-income ETFs have attracted many investors because they are perceived to be more profitable。

The sell-off in traditional fixed-income products, including bonds, has been widening as investors prepare for higher interest rates, and the trend continued in October, while fixed-income ETFs bucked the trend.。According to BlackRock, US and European-listed fixed-income ETFs recorded a record net inflow of $235 billion in the first three quarters of this year, up from $169 billion in the same period last year and $222 billion in the same period in 2021.。

Analysts believe this is closely related to the yield of fixed income ETFs。Its higher yields are attractive to investors, while fixed income ETFs are becoming more and more popular as investment vehicles for professionals and institutions, and are becoming more and more widely used in model portfolios.。

Ben Seager-Scott, head of multi-asset funds at financial services firm Evelyn Partners, explained: "There is interest in fixed-income ETFs at the moment because they are a great way to easily access asset classes with increasingly attractive yields.。"

Prices in many countries have been on a downward trend as most central banks around the world raise interest rates at a faster pace。Since early 2022, the Fed's target rate has risen to 5.25% to 5.Interval of 5%。The unexpected resilience of the U.S. economy in recent months has made investors realize that the Fed may keep interest rates high for longer.。Concerns about the size of the debt the government plans to issue in the coming year have also pushed up government bond yields as the central bank seeks to shrink its balance sheet。

Although bond prices have fallen sharply as yields continue to push higher, inflows into ETFs holding long-term bonds have remained solid this year as investors expect interest rates to run high。According to TrackInsight, iShares' 20-year Treasury ETF was the best-selling fixed income ETF of the year, attracting $17.9 billion in inflows in the year to October 18.。

And, despite the recent underperformance of fixed-income products, strategists expect investors to continue to put money into them, as interest rates have been low for years and the asset class is not holding enough.。

Brett Pybus, global co-head of fixed income ETFs at BlackRock iShares, said: "I think we are in the early stages of reallocating fixed income products.。Pybus added: "Our analysis shows that fixed-income allocations to client portfolios in Europe, the Middle East and Africa have grown by an average of 10 per cent.。"

Rohan Reddy, director of research at fund manager Global X, said: "With short-term rates much higher than long-term rates, it makes sense for investors to focus on one to three-month ETFs.。The trend reflects an influx of investors seeking alternatives to cash into money market funds this year.。

However, there are certain risks associated with buying fixed income ETFs, especially in terms of high-yield ETFs。As the impact of rising global interest rates begins to become apparent, investors have become more cautious about buying high-yield ETFs, as the risk of default by high-yield-grade companies has been rising as companies are increasingly forced to refinance at higher rates。

Data from TrackInsight showed a net outflow of $1.3 billion from high-yield ETFs in the year to October 2, compared with a net inflow of more than $200 billion from investment-grade ETFs.。

In addition to investment grade ETFs, government ETFs are also popular with investors。Some investors choose ETFs that hold index-linked government bonds, hoping to lock in returns before inflation。A lot of money in the U.S. goes to highly credit-rated sovereign debt ETFs。In the year to October 9, U.S. Treasury ETFs absorbed more than $100 billion。S., such ETFs have higher yields than their long-term counterparts。