Demand for fixed income ETFs is surging, hitting $2 trillion with $186 billion in inflows.

From Yahoo Finance: 2025-07-02 06:10:00

The US fixed income ETF market reached $2 trillion in June, fueled by $186 billion in inflows in the first half of 2025. Factors driving demand include higher yields compared to the near-zero rates of the past decade. Advisors are increasingly turning to fixed income funds for income.

The iShares 0-3 Month Treasury Bond ETF led in net sales, followed by the SPDR Bloomberg 1-3 Month Treasury Bill ETF and Schwab Mortgage-Backed Securities ETF. The Schwab Mortgage-Backed Securities ETF saw over 10,000% organic growth, with Vanguard, Capital Group, and JPMorgan launching new fixed income ETFs.

Active management plays a role in meeting demand, with many new fixed income ETFs being actively managed. Unlike equities, fixed income has seen outperformance by various firms. The Vanguard High Yield Fixed Income ETF is the latest offering in this space.

Read more: Fixed Income ETF Assets Hit Record $2T