Mercer | ETFs — No Panacea for High-Yield Replication

Investors looking for better diversification and enhanced alpha opportunities should consider a global approach when allocating to high yield.

Our Thinking / Wealth / Exchange Traded Funds

ETFs — No Panacea for High-Yield Replication
Calendar05 October 2017

Since the introduction of fixed income exchange-traded funds (ETFs) in 2002, the asset management industry has seen a seismic growth in the amount of assets and the number of products coming to market.
 

ETFs were once seen primarily as an equity vehicle; however, fixed income ETFs have shown remarkable popularity, increasingly serving as a core placement in an investor’s passive lineup.

Considering that high-yield ETFs employ a stratified sampling approach, it will always be challenging to track the index during times of increased market volatility.

Investors looking for better diversification and enhanced alpha opportunities should consider a global approach when allocating to high yield. Find out more on Mercer's perspective: The Evolution and Benefits of Global High Yield

 

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