TY - JOUR T1 - On the Performance of Fixed-Income Exchange-Traded <br/>Funds JF - The Journal of Index Investing SP - 39 LP - 44 DO - 10.3905/jii.2012.3.1.039 VL - 3 IS - 1 AU - Patrick Houweling Y1 - 2012/05/31 UR - https://pm-research.com/content/3/1/39.abstract N2 - The authors evaluate the performance of fixed-income exchange-traded funds (ETFs). They find that Treasury ETFs are indeed able to track their benchmarks but that investmentgrade corporate bond ETFs underperform their benchmarks and high-yield corporate bond ETFs severely underperform their benchmarks. They provide evidence that the transaction costs of the underlying bonds are a key determinant of an ETF’s underperformance. The authors conclude that indices consisting of bonds that are more costly to trade are more difficult to track.TOPICS: Exchange-traded funds and applications, mutual fund performance, portfolio construction ER -