HONG KONG, Feb 20 (Reuters) - Flows into fixed income exchange-traded funds (ETFs) are growing rapidly with Asian institutional investors looking to earmark an increasing chunk of their investments into such products this year, according to a survey done by Greenwich Associates.

Among 59 institutional investors participating in the research firm's survey, 44 percent said they plan to increase allocations to bond ETFs this year, compared with 14 percent in 2016.

Geir Espeskog, head of ETF and index investment Asia-Pacific distribution at BlackRock, said inflows from Asian clients have surged "thanks to the ease of usage and greater international diversification".

Inflows for fixed income ETFs were around $7 billion in 2016, compared with about $2 billion the previous year, he said.

While gains for equity ETFs at the expense of active money managers have been well documented, the recent popularity of fixed income ones indicates Asian institutional investors are turning towards such products in a bid to generate improved performance.

In 2016, actively managed funds posted outflows of $92.3 billion globally, while index funds brought in a record $625.2 billion, with Vanguard, BlackRock and State Street grabbing the top three spots in terms of net inflows, according to Morningstar Inc.

BlackRock's Espeskog said the average spread in its U.S. listed high-yield bond ETF stood at 1 basis point compared to roughly 50 basis points on a single bond, highlighting the desire among investors to buy such products to save costs and time in trading them.

In the survey, more than half of the respondents said they used ETFs to make tactical adjustments in their portfolios while core allocation needs and international diversification strategies came second and third.

A factor driving increased acceptance from Asian institutional investors of ETFs is liquidity needs amid a changing interest-rate environment.

While many expect the U.S. Federal Reserve to approve multiple rate hikes this year, other major central banks such as the Bank of Japan may resume monetary easing policies.

Among fixed-income ETFs, usage is highest in international government bonds followed by international investment grade and high yield credit respectively, according to the survey.

(Reporting by Saikat Chatterjee; Editing by Richard Borsuk)