Fixed Income ETFs Offer Increased Opportunities in 2024

With 2024 just around the bend, fixed income exchange-traded funds (ETFs) are offering investors bright prospects for bond exposure in the new year and capital allocation is expected to increase.

“Fixed-income ETFs have been garnering significant interest from investors, with inflows expected to continue the 2023 trend well into 2024,” noted Christopher J. Day, founder of Days Global Advisors, in CNBC, adding that they can offer investors an effective and efficient way to diversify portfolios. For example, an investor looking to get a 60-40 stock-bond exposure mix can do so with the use of ETFs as opposed to individual bond holdings.

Moreover, fixed income ETFs come with diversified exposure to various corners of the bond markets. This includes international fixed income exposure or more specifically, emerging markets bonds, which was once only accessible by well-capitalized investors.

As Day mentioned, the current macroeconomic environment couldn’t be better for getting fixed income ETF exposure. In 2024, “with expectations that the Federal Reserve may be nearing the end of its rate hiking cycle, it might be a great time to consider fixed-income ETFs, more so for those with an overweight cash position.”