Fixed income ETFs
Expanding the toolkit
The role ETFs play in modern fixed income allocation
Fixed income ETFs have entered the mainstream, driven by strong demand, attractive yields, and a broadening opportunity set. In 2024 and 2025, the asset class recorded record inflows of $306bn and $430bn, respectively.
Adoption continues to accelerate. ETFs captured 71% of combined fixed income ETF and mutual fund net flows last year, despite representing only 30% of total assets¹. Investor allocations have focused on higher-quality sectors and shorter durations, with active ETFs making up a growing share of fund launches and flows.
Why ETFs in fixed income
Fixed income ETFs have become a core tool for gaining bond market exposure. While individual bonds play an important role in many portfolios, ETFs offer a different way to access fixed income – one that can simplify implementation, improve portfolio flexibility, and support a wide range of investment objectives. From long-term core allocations to tactical positioning and liquidity management, fixed income ETFs provide investors with efficient access across rates, sectors, and various segments of the bond market.
Using ETFs for efficient bond exposure
Advantages versus portfolios of individual bonds
Convenient rebalancing
Liquidity and efficiency
Transaction costs
Multiple uses within a portfolio
Core holdings
Tactical and satellite positions
Liquidity sleeve
Transition management
Video
Five misconceptions about fixed income ETFs
With fixed income ETFs now more integrated into portfolios, the focus turns to how they work in practice. Jason Bloom, Head of Fixed Income ETF Product Strategy, addresses some of the most common misconceptions around fixed income ETFs – and explains what actually matters in real-world markets.
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Shaping fixed income today
Fixed income ETFs sit within Invesco’s broader fixed income platform, built on global macro and credit research and decades of bond market experience. That expertise informs how strategies are constructed, managed, and adapted within the ETF wrapper.
$61.5bn
Fixed income ETF AUM²
19+ years
Years in the fixed income ETF space
60
Number of fixed income ETFs³
Our approach
Designed for every portfolio
Invesco’s range of fixed income ETFs provide investors with tools to target duration, reach beyond traditional benchmarks, and pursue outperformance.
Target maturity
Defined maturity ETFs provide investors a targeted duration exposure and more predictable outcomes relative to traditional funds.
Access
Investors can access non-core segments of fixed income markets not captured by aggregate indices and use smart beta methodologies.⁴
Active management
Actively managed fixed income ETFs attempt to outperform a benchmark index.
Putting these ideas into practice
Our products
Explore a selection of fixed income ETFs that demonstrate these strategies in action.
GSY
Invesco Ultra Short Duration ETF
Seeks income above cash equivalents while emphasizing capital preservation and daily liquidity through a diversified, low-duration fixed income portfolio.
IROC
Invesco Rochester High Yield Municipal ETF
Seeks federally tax-exempt income through a portfolio of higher-yielding municipal bonds, with duration generally maintained below 7.5 years.
GTO
Invesco Total Return Bond ETF
Is a comprehensive fixed income solution that expands beyond traditional core exposure for maximum total return opportunities.
VRIG
Invesco Variable Rate Investment Grade ETF
Seeks to deliver attractive income through a diverse mix of investment-grade variable-rate exposures.
VRP
Invesco Variable Rate Preferred ETF
Provides exposure to US dollar-denominated floating- and variable-rate preferreds and hybrid securities with relatively low rate sensitivity.
PZA
Invesco National AMT-Free Municipal Bond ETF
Provides exposure to long-term, investment grade municipal bonds that are exempt from federal income tax and the alternative minimum tax.
Insights from our dedicated team
Our dedicated team helps fund buyers navigate due diligence on fixed income ETFs, from new product introductions and benchmarking to comparing ETF wrappers and methodologies – so investors can make decisions with confidence.
Discover more from Invesco
Video
Access the bond markets through Invesco ETFs
Jason Bloom, Head of Fixed Income ETF Product Strategy, describes why ETFs are fast-becoming a go-to tool for fixed income investors who are focused on fees, taxes, transparency, and liquidity and how Invesco can help investors accomplish their investment goals.
