BIFs are still relatively young, with the first bond ETF launched in 2002 by iShares. ETFs simplified how investors all over the globe access fixed-income markets. Investors can use ETFs for convenient, low-cost exposure to thousands of bonds. As of March 31, 2022, bond ETFs have grown to US$1.7 trillion ($2.3 trillion) in AUM and more than 1,400 ETF products around the world.
A bond index fund (BIF) is a diversified portfolio of bonds that are chosen to align with the performance of a specific bond index.
Some of the most common bond indices attempt to track the US investment-grade (IG) bond market and Asiadollar credit market. Essentially, a BIF invests in those securities in the index to closely match that performance. A BIF can come in many forms, including bond mutual funds and exchange-traded funds (ETFs) that invest in bonds.
