ETF Edge on how demand for liquid ‘alts' is growing, as investors diversify amid market volatility,

• Market volatility is prompting investors to seek diversification, leading to significant growth in fixed income ETFs.
• Fixed income ETFs have fundamentally changed market liquidity and price discovery, with active management gaining traction.
• Liquid 'alts' are emerging as key tools for diversification, offering market-neutral, long-short strategies to mitigate directional market risk.
• Concerns about liquidity and asset-liability mismatches in private credit are being addressed through ETF wrappers, providing daily liquidity and lower leverage.

The discussion centers on increasing market volatility driving investors towards diversification, particularly through fixed income ETFs and 'liquid alternatives.' Experts highlight the evolution of fixed income ETFs, the rise of actively managed fixed income products, and the role of liquid alts in offering market-neutral, long-short strategies to address challenges like equity concentration and bond diversification issues in a post-COVID, inflationary environment.