A growing number of financial advisers are incorporating fixed-income exchange-traded fund ( ETF ) solutions into their clients' portfolios as product development efforts accelerate, according to a new report.

Fixed-income ETFs, which hold diversified portfolios of debt securities, including government, corporate, and municipal bonds, have experienced steady growth in the United States. Assets in taxable fixed-income ETFs increased from US$1.2 trillion in 2022 to nearly US$2 trillion at the end of 3Q 2025, while tax-free fixed-income ETFs grew from US$106 billion to US$165 billion, research and consulting firm Cerulli Associates says.  

In the last three years, more than 300 new fixed-income ETFs have been launched, and the expectation that these products will significantly influence future flows, as they offer a convenient, cost-effective way to access the bond market, is fuelling the rapid development of both passive and active solutions. 

Several factors have driven this growth, including advisers becoming more familiar with using ETFs for fixed income, a more favourable interest rate environment, and the development of a more diverse set of fixed-income ETF solutions by issuers, according to The Cerulli Edge ( US Product Development, 4Q 2025 Edition ). 

“As ETF issuers expand their product lineups, they also continue to develop a more robust educational platform, providing advisers with additional resources to better understand how these products operate and behave in various market conditions. This has allowed advisers to become more comfortable and familiar with fixed-income ETFs,” says Kevin Lyons, senior analyst at Cerulli.   

Research shows that 59% of ETF issuers cite US fixed income as a priority for product development. These initiatives span several subcategories – 87% of ETF issuers identify taxable fixed income as a chief priority, followed by international/global fixed income ( 65% ), municipal strategies ( 63% ), and defined outcome products ( 38% ).

“Key factors that ETF issuers expect will influence fixed-income ETF flows over the next two years include strong innovation in fixed-income products, fixed-income exposures paying higher yields, and greater adviser familiarity with fixed-income ETFs,” Lyons adds.