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Did the "soft landing" occur six months ago, at least in market terms? The leadership profile speaks, perhaps, to an elongated economic and Fed tightening cycle and suggests where within a notably bifurcated market investors should migrate. For one thing, the stock market surely can be prone to misapprehending the next macro turn and can overshoot reality in the short term. BCA Research here shows the sobering harmony in the current market trajectory and that of the early-2000s post-tech-bubble bear market. We can note, though, that the S & P 500 back then never spent as much as a month above its 200-day moving average as it has this year.
U.S. equity funds post biggest weekly outflow in eight weeks
  + stars: | 2023-03-03 | by ( ) www.reuters.com   time to read: +1 min
Refinitiv Lipper data showed investors offloaded a net $12.9 billion worth of U.S. equity funds, booking their biggest weekly disposal since Jan. 4. Fund flows: US equities, bonds and money market fundsMeanwhile, money market funds drew a net $64.86 billion, the biggest weekly inflow in eight weeks, amid a risk-off mood among investors. U.S. large- and mid-cap equity funds faced $6.27 billion and $267 million worth of outflows, while investors drew $1.32 billion out of the small cap funds, snapping a four-week-long buying streak. Fund flows: US equity sector fundsMeanwhile, U.S. bond funds obtained $2.79 billion in inflows after witnessing two weeks of net selling. Investors purchased U.S. short/intermediate government & treasury funds of $4.75 billion, while general domestic taxable fixed-income funds attracted $1.9 billion worth of inflows.
Global equity funds see biggest weekly outflow in two months
  + stars: | 2023-03-03 | by ( ) www.reuters.com   time to read: +2 min
March 3 (Reuters) - Global equity funds suffered their biggest weekly net selling in two months in the seven days to March 1 as global stocks fell after strong U.S. economic data stoked fears about further rises in interest rates. Data from Refinitiv Lipper showed global equity funds saw a net $13 billion worth of outflows in the week to March 1, the biggest amount since Jan. 4. Fund flows: Global equity sector fundsMeanwhile, global bond funds accumulated $6.83 billion worth of inflows, compared with just $1.46 billion worth of net purchase in the previous week. Government bond funds attracted $4.38 billion and corporate bond funds secured $3.56 billion with outflows from high-yield funds easing to a three-week low of $1.74 billion. Data for 23,732 emerging market funds showed equity funds drew an eighth weekly inflow, worth $1.56 billion, but bond funds remained out of favour for the third week with $924 million in outflows.
Treasury yields are taking markets by storm. Investors with those preferences have also been flocking to short-term Treasury exchange-traded funds with durations of one to three years. Some examples include Vanguard Short-Term Treasury Index ETF and the Schwab Short-Term U.S. Treasury ETF. Top-rated, short-term bond ETFs But there's another corner of the short-term bond market with yields that could go even higher. CNBC Pro screened for top-rated, ultra-short term bond funds using Morningstar data.
Socially conscious investors favored bond funds more than stocks for the first time, new Morningstar data shows. Sustainable bond funds amounted to three-fourths of overall net flows within sustainable funds, up from 16% in 2021. That jump helped fixed income funds overtake equity-focused peers in holding the lion's share of net inflows last year. Sustainable bond funds posted a $2.4 billion net annual inflow, compared with a loss of $335 billion seen among non-sustainable taxable- and municipal-bond funds. Still, the top fixed sustainable income funds held up better than the broader stock market last year.
So far traders are optimistic, comforted by an initially small pace of bond sales and a predictable structure. U.S. and UK central banks have started QT, although the Bank of England was forced to delay its plans following turmoil in British bond markets last year. said DZ Bank's head of government bond trading Dalibor Jarnevic. If APP reinvestments stop before the end of 2024, ECB market presence would rely on reinvestments under the more flexible Pandemic Emergency Purchase Programme (PEPP). Whatever the size or pace, traders are seeking opportunities as the ECB makes the shift to QT.
Investors searching for income were buoyed by the move higher in the 10-year Treasury yield, but there are also some other opportunities to bring in some cash. "They can blend A with AA and AAA and you can get better yields," Weinberg explained. In fact, a good signal to buy munis is when their yields are at least 85% of corresponding Treasury yields, he said. Investors can also buy municipal bond funds to get exposure to the market. Investors can also get exposure through a diversified exchange traded fund, such as the iShares iBoxx $ Investment Grade Corporate Bond ETF .
Morning Bid: Long March ahead
  + stars: | 2023-02-27 | by ( ) www.reuters.com   time to read: +5 min
"If it goes down that road it will come at real costs to China," White House national security adviser Jake Sullivan told CNN. China said on Monday it sought dialogue and peace for Ukraine despite the U.S. warnings. European stocks and U.S. futures recaptured some ground on Monday but the DXY dollar index briefly hit its highest since Jan. 6. The new U.S. interest rate horizon remains jarring, however. Meanwhile, Warren Buffett's Berkshire Hathaway (BRKa.N) on Saturday reported its highest-ever annual operating profit, even as foreign currency losses and rising interest rates contributed to lower earnings in the fourth quarter.
U.S. equity funds see biggest weekly outflow in seven weeks
  + stars: | 2023-02-24 | by ( ) www.reuters.com   time to read: +2 min
Refinitiv Lipper data showed investors withdrew a net $6.88 billion out of U.S. equity funds, marking their biggest weekly outflow since Jan. 4. Fund flows: US equities, bonds and money market fundsU.S. large-, and mid-cap funds suffered weekly disposals of $5.68 billion and $389 million respectively but small-cap received a marginal $79 million worth of inflows. Tech and real state witnessed $856 million and $603 million worth of outflows, while consumer discretionary and utilities, both lost about $300 million in net selling. U.S. high yield and municipal debt funds suffered outflows of $6.4 billion and $1.78 billion, respectively, but U.S. short/intermediate government and treasury funds saw about $4.85 billion worth of net buying. Fund flows: US bond fundsMeanwhile, money market funds obtained $541 million, marking a second weekly inflow in a row.
The recent move higher in Treasury yields appears to be sparking a shift back into short-term bond funds by investors. The 10-year Treasury yield is threatening to climb back above 4%, and the 6-month yield has already topped 5%. The three biggest funds for inflows over the past week were short-term Treasury ETFs, led by the iShares Short Treasury Bond ETF (SHV) , according to FactSet. When interest rates are rising, short-term bonds become more attractive for investors. The FolioBeyond Rising Rates ETF (RISR) , which invests in a slice of mortgage products that benefit from higher rates, is still under $100 million in assets despite outperforming in 2022.
REUTERS/Lisi NiesnerLONDON, Feb 24 (Reuters) - Global investors have allocated $354 billion to cash since Russia's invasion of Ukraine first shook global financial markets in February 2022, according to data released by Bank of America on Friday. The price shock forced central banks to hike interest rates, clobbering stock and bond markets in the process. Since February 2022, investors have pulled $135 billion from bond funds, BofA said, citing figures from financial data company EPFR. Investors have become more positive at the start of 2023, especially about bonds, even as the Ukraine war drags on. Flows into bond funds continued for the eighth straight week last week, BofA said, at $4.9 billion.
Finally! Savings Rates Could Soon Beat Inflation
  + stars: | 2023-02-23 | by ( ) www.wsj.com   time to read: +6 min
Why savings rates could rise in 2023Fortunately, many experts predict the situation will reverse, with inflation on a downward trend even as the Fed continues nudging up interest rates. Since the most generous banks have increased their rates in tandem with the Fed, they would likely increase savings rates as well. Bottenfield doesn’t see savings account interest rates surpassing the rate of inflation before 2024. “The difference between an online savings account and the average brick and mortar account is huge right now,” says Tumin. If you think interest rates will fall, you can lock in mid-4% rates long-term with a five-year CD.
How can investors ride on higher yields? Buy high-quality or short-term fixed income BlackRock Investment Institute said it likes high-quality credit and short-end government bonds "as interest rates stay higher for longer." "Fixed income finally offers 'income' after yields surged globally. "We believe that investors should hold around 2% of cash in their portfolios and should use short-term fixed income (anything below a 2-year maturity) as a proxy for cash," Alvarado added. Wells Fargo Investment Institute's tactical portfolios are allocating between 2% (for "aggressive growth investors") and 17% (for conservative income investors) to short-term fixed income.
Global equity funds see outflows on rate hike worries
  + stars: | 2023-02-10 | by ( ) www.reuters.com   time to read: +2 min
Refinitiv Lipper data showed investors withdrew about $209 million from global equity funds in the week to Feb. 8, marking their first weekly net selling since Jan. 4. read moreU.S. equity funds recorded outflows of $470 million, although investors purchased European and Asian funds of about $100 million each. Global short- and medium-term bond funds remained in demand for a third week as they received a net $2.38 billion. Global bond fund flows in the week ended Feb 8Global money market funds recorded outflows of $4.47 billion compared with the previous week's $1.12 billion net purchases. Data for 24,697 emerging market (EM) funds showed equity funds secured a net $2.74 billion in a fifth successive week of net buying, while bond funds obtained a net $1.3 billion worth of inflows.
Feb 7 (Reuters) - Emerging market bond and equity funds received heavy inflows in January after a dry patch last year, aided by China's reopening and softening inflation pressures worldwide. According to Refinitiv Lipper data, which covers over 33,700 emerging market (EM) funds, EM equity funds received $13.2 billion, and EM bond funds obtained $11.36 billion in January. Fund flows: EM equities and bondsIn 2022, EM bond funds faced a combined net outflow of $26.26 billion. In January, the iShares Core MSCI Emerging Markets ETF and iShares JPMorgan USD Emerging Markets Bond ETF received $3.2 billion and $2.4 billion, respectively, while iShares MSCI Emerging Markets ETF and BlackRock Emerging Markets Fund; Inst obtained over $1 billion each. Initial euphoria over China's reopening has fizzled out and EM assets have seen slight declines in February.
Bond yields and prices move inversely to each other so, as rates rose, prices tumbled – and did so at an inopportune time since stocks were suffering, too. Thus, they have higher interest rate risk and greater price fluctuation. He likes short-term Treasury bond funds and ETFs. Another way to mitigate interest rate risk is to use a barbell: You hold equal amounts of shorter and longer-dated issues. "You don't have to reach too far in terms of credit risk and interest rate risk to capture healthy yield in today's environment."
Add to that mix the classic 60/40 portfolio model — a standard investing benchmark — that helps investors achieve that last point. Below, CNBC Select spoke to two financial professionals about how novices can put a 60/40 portfolio strategy in action. Once you're ready to invest, here are four simple ways to start putting money into a 60/40 portfolio. Vanguard Learn More Minimum deposit and balance Minimum deposit and balance requirements may vary depending on the investment vehicle selected. Wealthfront Learn More Minimum deposit and balance Minimum deposit and balance requirements may vary depending on the investment vehicle selected.
U.S. bond funds gain inflows for fourth week in a row
  + stars: | 2023-02-03 | by ( ) www.reuters.com   time to read: +1 min
Feb 3 (Reuters) - U.S. bond funds drew money inflows for a fourth straight week in the seven days to Feb. 1, on hopes of slowing rate hikes, with its economy grappling against a slowdown. Refinitiv Lipper data showed investors purchased a net $197 million worth of U.S. bond funds, although a big drop from the previous week's $4.84 billion worth of net purchases. read moreInvestors purchased $438 million worth of municipal bond funds, but U.S. taxable bond funds witnessed $252 million worth of outflow, the first weekly net selling in five weeks. U.S. short/intermediate investment-grade funds received $2.81 billion worth of inflows, the biggest amount in three weeks, while U.S. emerging markets debt funds had $273 million worth of net buying. Investors sold tech and real estate sector funds of $261 million and $248 million, respectively, but energy funds drew $436 million worth of inflows.
The rally comes after Treasuries notched the worst year in their history following the Fed's most aggressive monetary policy tightening since the 1980s. Some equity investors are nevertheless playing it safe, expecting the current rally in stocks to wilt if a recession hits. For now, many investors are wedded to a more dovish view, betting that policymakers will blink if growth starts to slow. "The Fed is closer to the end than the beginning, and rates usually fall across the curve when the Fed is finished raising rates." Of course, some investors are happy to take the central bank at its word and are betting rates stay higher for longer.
Some hedge funds, wealth managers, and asset managers are still hiring. Recruiters told us what roles are in demand and what skills can help you land them. Big-name hedge funds like Citadel, D. E. Shaw, and Millennium Management posted double digits in a year that many other investment managers would rather soon forget. Alternative asset managers, meanwhile, are hiring in the private-wealth-management businesses they've spent recent years building out. … if you're in or interested in wealth managementDespite the market downturn, wealth managers are in high demand.
Global equity funds attract inflows for third week in a row
  + stars: | 2023-01-27 | by ( ) www.reuters.com   time to read: +2 min
Jan 27 (Reuters) - Global equity funds received inflows for a third straight week in the week to Jan. 25 as easing recession fears and hopes of smaller rate hikes by the Federal Reserve kept sentiment buoyant. Refinitiv Lipper data showed global equity funds obtained $3.23 billion worth of inflows during the week, compared with $5.16 billion worth of net purchases in the previous week. European and Asian equity funds received $3.15 billion and $1.36 billion worth of inflows, but investors sold about $1.14 billion worth of U.S. equity funds. Fund flows: Global equity sector fundsMeanwhile, global bond funds accumulated a net $11.35 billion worth of inflows in a fourth successive week of net buying. Data for 24,502 emerging market (EM) funds showed equity funds attracted a net $5.02 billion in a third successive week of net buying, while bond funds obtained a net $3.9 billion worth of inflows.
Some hedge funds, wealth managers, and asset managers are still hiring. Layoffs across industries have been dominating headlines in January, and Wall Street has been no exception. Big-name hedge funds like Citadel, D. E. Shaw, and Millennium Management posted double digits in a year that many other investment managers would rather soon forget. Alternative asset managers, meanwhile, are hiring in the private-wealth-management businesses they've spent recent years building out. Emily Landon, the CEO of the Chicago-based headhunting firm The Crypto Recruiter, pointed to the job board Crypto Careers, which has over 2,400 openings.
The iShares MSCI emerging market Asia exchange traded fund is up 11% and the iShares core MSCI emerging markets ETF is up more than 10% since the year began. For Kotler, it's emerging market bonds, where his firm has an overweight rating as opposed to a neutral rating on equities. One other factor that should help emerging market countries outperform in 2023 is the winding down of the strength of the U.S. dollar. Some top emerging market bond funds include the iShares JP Morgan USD Emerging Markets Bond ETF , the Vanguard Emerging Markets Government Bond ETF and the VanEck JP Morgan EM Local Currency Bond ETF. Of course, the downside to large emerging market funds is that they tend to be most heavily weighted to China, as it's the largest emerging market country.
Yet boring old bonds have just about kept pace, as investors rush to lock in healthy-seeming yields after one of the worst years ever for fixed-income returns. The Federal Reserve's historically aggressive tightening campaign last year gouged debt portfolios but quickly rebuilt the supply of safe yield on offer for today's buyers. I made the case for bonds' value from this perspective in a column here three months ago , just as Treasury yields were peaking. The good news is that "real yields," meaning yields above the market's implied outlook for inflation, remain positive. The American Association of Individual Investors' monthly asset allocation survey for December showed bonds at 14.3%, below the survey's long-term average of 16%.
Global equity funds post second weekly inflows in a row
  + stars: | 2023-01-20 | by ( ) www.reuters.com   time to read: +2 min
Refinitiv Lipper data showed global equity funds obtained $5.24 billion worth of inflows during the week, a tad higher than the previous week. Fund flows: Global equities, bonds and money marketEuropean equity funds received $7.06 billion, while Asian equity funds obtained $1.16 billion. Meanwhile, global bond funds also had inflows for the third consecutive week, drawing $13.23 billion worth of money. Investors purchased global corporate funds worth $3.74 billion, with high-yield funds luring $2.1 billion. Fund flows: Global equity sector fundsGlobal money market funds faced their first outflow in four weeks, suggesting increased investor risk appetite.
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