‘Illiquidity Doom Loop’ Threatens Bond ETFs Caught Up in Turmoil
- BlackRock’s European credit product traded at record discount
- ECB should buy region’s investment-grade bond ETFs: Chatwell
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The rout in European bonds has set in motion what could become an “illiquidity doom loop” in the region’s investment-grade debt ETFs, Mizuho International Plc warns.
While this month’s sell-off has inflicted only minor stress on most exchange-traded products, some have seen extreme gaps form between the price and the value of assets, signifying disorder in the underlying markets. That has reignited anxiety about fixed-income ETFs, which are more liquid than the assets they hold.