Exchange-traded funds (ETFs) have revolutionized the way investors access the stock market. Since the global bond market is much larger than the equity market, it stands to reason that bond ETFs should experience equal popularity with retail and institutional investors.

Friday morning, BlackRock Canada held a briefing session on exactly this topic. Warren Collier, head of iShares Canada, likened the current juncture for bond ETFs to where equity ETFs were when he joined the firm in 1999.

“Before XIU [iShares i60s, one of the largest Canadian equity ETFs] TIPS [Toronto Index Participation Units] had been out for a few years; there was an understanding of what equity ETFs were but it was not very deep. They were used by insttitutional and direct retail investors and advisers were starting to ask questions about them. The conversations today about fixed-income ETFs reminds me of those conversations.”

Still, compared to equity ETF penetration globally, fixed-income ETF market penetration is still relatively low. Equity ETFs make up 3% of the global equity market. Even though the fixed-income market overall is larger, fixed-income ETFs make up only 0.4% of the global fixed-income market, Collier said.

“So globally we’re still very early. There’s an incredible amount of growth left for Fixed Income ETFs globally.”

Generally, iShares executives downplayed the risk to bond investors of interest rates going higher by the end of the year, which seems to be the consensus about when the Fed will finally start hiking rates.  Still, they agreed retail investors increasingly are looking for help in worrying about what fixed-income products are appropriate in this environment.

Moving from Building Blocks to Solutions

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My new Millennial Money blog in the Financial Post today is entitled Don’t bother saving in your 20s? Why Millennials shouldn’t waste the gift of time. This post has attracted a bit of attention on my Twitter feed.

For example, Tisa Silver, author of The Time Value of Life: Why Time is More Valuable Than Money, said this:

“Thanks for sharing, Jon. You know how I feel about time! There is a heavy price to pay for procrastination.”

Financial planner Cory Papineau tweeted:

Ask Mom and Dad how that worked out!

To which, another fellow author, Robert Gignac — author of Rich is a State of Mind — replied:

But I really, really *want* stuff today – why don’t old people get that? Oh sorry, what was I thinking?

Over at Linked In, Jeanne Klimowski, CEO of Wavelength Financial Education Inc., wrote:

Great post Jonathan. It is a tragedy that most people don’t learn about the huge role time plays in investing until it’s too late to take advantage of it. Thanks for getting that message across — it is so incredibly important to young people, especially in light of the widespread retirement savings crisis out there today.

We’ll say a little more about this topic in this weekend’s wrap. In the meantime, reader comments below are welcome. No doubt we’ll be writing more about this topic as time goes on.