Fed ETF purchases increase 433% providing 'much needed liquidity'

Total purchases rise to $6.9bn

The US Federal Reserve has stepped up its ETF purchasing programme, increasing the total amount by 433%, while expanding its definition of eligible assets to include individual corporate and broad market index bonds.

The latest disclosure from the Secondary Market Corporate Credit Facility (SMCCF), the Fed's programme to "support credit to employers by providing liquidity to the market for outstanding corporate bonds", saw total purchases rise to $6.9bn and the number of ETFs increase to 16 with the inclusion of SPDR Bloomberg Barclays Short Term High Yield Bond ETF. Although seven of the 16 funds purchased are high yield ETFs, nearly 90% of assets have been invested in investment grade credit, with three funds alone each receiving over $1bn of central bank money. Paul Syms, head of EMEA ETF fixed...