Can Bond ETFs Have Another Banner Year?


There's one word to describe the exchange-traded bond-fund business and market in 2009 -- booming. Can fixed-income ETF investors expect more of the same in 2010? Although assets in bond ETFs still pale in comparison to assets in bond mutual funds -- $99 billion versus $2.1 trillion as of November 2009 -- bond ETFs experienced an explosion of growth in 2008 and 2009, says Mike Benedict, a certified financial planner with Weaver Wealth Management. Indeed, last year more than $39 billion flowed into long-only bond ETFs as of Nov. 30, the most recent data available, according to the National Stock Exchange. Meanwhile, more than $26 billion fled long-only U.S. stock ETFs.