BExchange-traded index funds, or ETFs for short, are popular. They offer the advantage of investing cheaply in certain markets. What immediately makes sense to almost all investors in equities – you simply buy everything that is in an index – is not that easy with bonds. Because although the German Rentenindex Rex is almost as old as the Dax, at least private investors hardly know it. “Many are simply not used to reading the development of the bond market on an index,” says Antoine Lesné, head of the European strategy department at SPDR, the ETF arm of the wealth manager State Street.
In the case of bonds, people were used to always choosing individual stocks. After all, the price development was less interesting, interest was collected and waiting for the repayment. In the age of lowest and negative interest rates, this is actually no longer an option. Whoever invests in bonds builds on the price development, and to implement this tactic, ETFs are a simple and transparent instrument, says Lesné.