The Canadian corporate bond market is increasingly made up of bonds that are rated at the bottom end of investment grade, according to FTSE Russell.

The indexing firm reported that BBB-rated corporate bonds represent a growing share of the corporate bond market. Its index of BBB-rated bonds includes 326 issuers, representing $141.1 million in market cap.

This is equivalent to 29% of the market cap of the FTSE Canada All Corporate Bond Index. By comparison, back in 2004, BBB-rated issuers represented 14% of the index.

“The past few decades have seen an increase in the proportion of the Canada corporate bond universe with BBB rating,” said Marina Mets, head of Americas fixed income and multi-asset index product management at FTSE Russell.

“Having fixed income benchmarks that accurately and transparently measure this market over time for investors is critical,” she added.

BMO Asset Management, Inc. recently introduced new ETFs to track FTSE’s BBB bond index and its A+ corporate bond index.

“The changing nature of the Canada fixed income market underscores the need for investors to have strong tools to gain exposure to different market segments,” said Mark Raes, head of product at BMO Global Asset Management.