| The latest BIS Annual Report, released on Sunday, cites numerous concerns about the unseen damage being caused to financial stability on account of ultra-low interest rates. Key among those concerns: how liquidity-guaranteeing ETFs in the bond sector may be contributing to a global liquidity illusion, disguising the true state of the ability to trade positions on the bond market — a topic very close to FT Alphaville’s heart.
As the report notes (our emphasis): Another key change in bond markets is that investors have increasingly relied on fixed income mutual funds and exchange-traded funds (ETFs) as sources of market liquidity. Bond funds have received $3 trillion of investor inflows globally since 2009, while the size of their total net assets reached $7.4 trillion at the end of April 2015..............................................Full Article: Source
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