Fixed Income Smart Beta Gets $25 Trillion Endorsement

The video discusses the growing interest in factor investing within fixed income markets, particularly through ETFs. It highlights institutional investors' increasing use of factor ETFs and the potential scale of this trend. Concerns about bond ETFs, such as liquidity risks, are addressed, with arguments supporting their stability. The impact of Fed support on bond ETFs is also examined, noting its limited market influence but highlighting its role in promoting ETFs as a viable investment option.

What percentage of institutional investors believe factor investing can be applied to fixed income, according to Invesco's survey?

• 85%

• 75%

• 95%

• 65%

Why is factor investing becoming popular in the fixed income world?

• Due to its simplicity

• Because of large institutions seeking exposure and the scale of investments

• Because it guarantees high returns

• Due to government regulations

What is a major concern regarding bond ETFs?

• They are too expensive

• They are not diversified

• They are not regulated

• They may cause liquidity issues during market shocks

What did the research from the Swiss Finance Institute find about bond ETFs?

• They are always profitable

• They are more liquid than stocks

• They are not suitable for institutional investors

• They cause bonds to behave similarly, increasing risk during sell-offs

How did bond ETFs perform during the market fluctuations in March and April?

• They lost significant value

• They were banned by regulators

• They remained liquid and tradeable

• They became illiquid

What is the responsibility of issuers regarding bond ETFs?

• To ensure the ETFs remain liquid

• To guarantee high returns

• To limit the number of investors

• To avoid diversification

How significant is the Federal Reserve's support in the bond ETF market?

• It causes market instability

• It is the main driver of the market

• It is relatively small compared to overall trading

• It has no impact