Higher ETF ownership lowers the volatility of corporate bonds returns, particularly small and less liquid bonds. The distinguishing features of ETF ownership– exchange trading and in-kind creation and redemption – have differential impacts. Secondary market trading, concentrated in just a few funds, serves as a liquidity buffer. The negative effect of ownership is heightened for bonds held by ETFs with greater trading volume and institutional ownership. In contrast, greater in-kind creation and redemption activity process mitigates the negative effect of ownership on volatility. Thus, ETF ownership serves as both a buffer and transmitter in corporate bond markets.