At The Money: How Fixed-Income Investors can use ETFs to their Best Advantage.

Summary of At The Money: How Fixed-Income Investors can use ETFs to their Best Advantage.

by Bloomberg

18m•June 10, 2026
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Overview of At The Money: How Fixed-Income Investors can use ETFs to their Best Advantage

In this Bloomberg At The Money episode, Barry Ritholtz speaks with Steve Laipply, Global Head of iShares Fixed Income ETFs at BlackRock, about how bond ETFs have transformed fixed-income investing. The discussion covers why bond ETFs offer transparency, intraday trading, and broad access; how they performed during major market stress; and how investors can use them today to balance income, duration, and inflation risk.

Why Bond ETFs Matter

Laipply explains that before bond ETFs, fixed-income trading was opaque, dealer-driven, and often inefficient:

  • Investors had to call multiple dealers for quotes.
  • Pricing was hard to verify in real time.
  • Access and execution quality varied by investor.

Bond ETFs changed that by making fixed income:

  • Transparent — holdings and prices are visible.
  • Accessible — investors can buy a diversified bond portfolio easily.
  • Tradable intraday — unlike mutual funds, they can be bought and sold throughout the day.
  • Lower friction — no need to negotiate by phone or rely on end-of-day pricing.

How Bond ETFs Compare to Bond Mutual Funds

The conversation contrasts fixed-income ETFs with mutual funds and separately managed accounts:

Key advantages of bond ETFs

  • Intraday trading at known market prices
  • Daily transparency in most cases, including many active strategies
  • Flexibility to respond to macro events like inflation data or Fed surprises
  • Broad product selection across maturities, sectors, and risk profiles

Where mutual funds still fit

  • They remain common in 401(k) and retirement plan structures
  • They are still useful for investors who prefer end-of-day processing

Market Growth and Product Breadth

The fixed-income ETF market has expanded dramatically:

  • Over 1,000 bond ETFs in the U.S.
  • iShares alone offers 160+ fixed-income ETFs in the U.S.
  • The category now spans:
    • Treasuries
    • Investment-grade credit
    • High yield
    • Emerging markets
    • Maturity-specific funds
    • Hedged products
    • Outcome-oriented strategies
    • Active fixed-income ETFs

Performance During Market Stress

A major theme of the episode is that bond ETFs have been tested in real crises and held up well.

During COVID-era stress in 2020

  • Trading in some underlying bonds, including Treasuries and investment-grade credit, became difficult.
  • Bond ETFs remained tradable and liquid, even when the underlying market was strained.
  • Investors were able to see price discovery and execute in record volume.

During the 2022 rate shock

  • The sharp rise in rates further validated the ETF wrapper.
  • The episode reinforced investor confidence that bond ETFs can function effectively during volatility.

How Investors Are Using Fixed-Income ETFs Today

With money market yields still attractive, Ritholtz asks why investors should move out the curve. Laipply’s answer: it does not have to be a binary choice.

Main portfolio message

  • Don’t try to time rates perfectly.
  • Use fixed-income ETFs to diversify across the curve.
  • Consider shifting some assets from cash-like instruments into intermediate-duration bonds.

Why intermediate duration?

  • Offers a balance between yield and interest-rate sensitivity
  • Avoids overcommitting to the short end or the long end
  • Helps if yields fall and bond prices rise

Inflation Protection and TIPS ETFs

The episode highlights Treasury Inflation-Protected Securities (TIPS) as an important tool.

Why TIPS matter

  • Inflation returned unexpectedly and remains a key risk
  • Energy and supply shocks can quickly revive inflation concerns
  • Investors may want explicit inflation protection in a resilient portfolio

Examples mentioned

  • STIP
  • TIP
  • ICPI for shorter-term inflation exposure

Laipply also notes that inflation protection is being embedded into broader bond products, reflecting a more cautious approach to future inflation risk.

Where the Opportunities Are in Fixed Income ETFs

Laipply emphasizes two major dimensions for fixed-income investors:

  • Credit
  • Duration

What investors currently prefer

  • High quality: Treasuries, investment-grade credit
  • Intermediate duration: not too short, not too long
  • Income-focused positioning: capture yield without taking excessive risk

“Plus” sectors gaining interest

Beyond core government and investment-grade bonds, investors are also looking at:

  • High yield
  • Emerging markets
  • Securitized assets, including:
    • Mortgages
    • Asset-backed securities
    • Commercial mortgage-backed securities

These areas can offer attractive income relative to their risk and duration profile.

Active fixed-income ETFs

The discussion also mentions active multi-income strategies that blend several of these sectors while aiming to keep risk controlled and income elevated.

Fed Uncertainty and Duration Strategy

The episode closes with a discussion of rate uncertainty and Fed expectations.

Core takeaway

  • The market has already priced in a view on future Fed moves.
  • The real question for investors is whether they agree with that pricing.
  • If not, they should adjust duration risk accordingly.

Practical guidance

  • If you expect inflation and rates to stay higher, reduce duration
  • If you expect rates to fall, extend duration
  • If you don’t want to make a call, stay diversified, especially in the intermediate part of the curve

Bottom Line

Bond ETFs now give investors a wide range of fixed-income tools that were much harder to access a few years ago. The main benefits are:

  • Better transparency
  • Easier trading
  • Broader diversification
  • Strong performance in stress periods
  • Flexible exposure to income, duration, and inflation protection

The overall message: fixed-income ETFs are no longer just a convenience—they are a core portfolio tool for navigating today’s uncertain rate environment.