BlackRock research pushes back at concerns over bond ETFs

BIS paper had suggested ETF sponsors may have sold illiquid assets to discourage redemptions

BlackRock New York office
Jerry Goldberg

New research published by BlackRock attempts to dispel concerns over the origins of large discounts that hit its bond exchange-traded funds (ETFs) during the Covid-19 market stresses.

The BlackRock paper explores the process around “redemption baskets” and whether these were deliberately customised to discourage redemptions during the period of stress in March and April 2020.

ETFs are meant to track their benchmark index closely. To minimise “tracking error”, market-makers and broker-dealers

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