Fidelity: Higher yields put fxed income ETFs in the spotlight

Fidelity: Higher yields put fxed income ETFs in the spotlight

5 november 2026

ETF's

The European UCITS ETF market recorded net inflows of USD 49.9 billion in October, down from the exceptionally high levels seen during the summer months.

While inflows into equity ETFs slowed to USD 24.1 billion, fixed income ETF inflows rose to USD 15.2 billion, almost 50% above both their three-month and twelve-month averages.

'Following the record-breaking summer months, we are seeing ETF flows normalise. At the same time, the balance is shifting, with fixed income gaining in importance,' says Stefan Kuhn, Head of ETF Distribution, EMEA at Fidelity International. 'Higher yields are creating attractive entry points for investors and making fixed income an important source of portfolio income once again.'

Equities: Investors diversify more broadly

In equities, the trend towards broader geographical diversification continued in October. Europe and emerging markets continued to attract positive inflows, while global strategies also remained in demand. Overall, however, inflows into equity ETFs fell to USD 24.2 billion, remaining below the averages seen in recent months.

Fixed income: Higher yields create attractive opportunities

Fixed income ETFs gained considerable momentum in October. At USD 15.2 billion, net inflows were almost 50% above both their short- and long-term averages. Corporate bond ETFs were particularly strong, attracting USD 4.2 billion, more than double their three-month average. Government bonds and high-yield also recorded positive inflows.

'Higher yields are making bonds an attractive source of income for investors once again,' says Kuhn. 'Strategies with shorter durations look particularly appealing in the current environment. They allow investors to capture attractive levels of income while reducing sensitivity to further increases in government bond yields.'

Active ETFs continue their growth trajectory

Active ETFs also recorded positive net inflows again in October. The asset class has now recorded monthly net inflows for four consecutive years. 'The more differentiated the market environment becomes, the greater the need for selectivity within individual asset classes,' says Kuhn.

'We’re seeing this in fixed income, for example, where duration, credit quality and issuer selection are becoming increasingly important. Our own research also suggests that active ETFs are becoming a more prominent part of professional investors’ strategic asset allocation.'

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