Letter: Rest assured, bond ETFs are a sound investment

In “Reality of corporate bond ETFs differs from the appearance” (Opinion, February 28), you cite research claiming that the portfolio management tactics of certain bond exchange traded funds magnify distortions in bond markets in times of market stress. We disagree.

Using public data, we have demonstrated that iShares’ “sampling” of corporate bond indices, using a subset of securities, consistently represents their indices’ risk profiles and characteristics. The data clearly shows that the way BlackRock manages its iShares fixed income ETFs does not translate into less liquid or adversely biased portfolios. And unlike equities, most bonds do not trade daily or on a single venue. Demand for better bond market access, using technology, has led investors to bond ETFs which, alongside other modernising forces, are profoundly reshaping the bond market, making it more digital, more transparent and more efficient than ever before.

Samara Cohen
Chief Investment Officer, iShares and Index Investments Business, BlackRock
New York, NY, US