There is more to juicing yield than hiding out in money market funds, and BlackRock says now is the time to hop into high-quality fixed income.
Indeed, the combination of higher interest rates and an inverted yield curve has made money market funds and Treasury bills tempting.
"As rates appear set to peak with the approaching end of the Fed's hiking cycle, investors may want to consider stepping into high-quality, medium-term fixed income."
BlackRock noted that intermediate and long-term fixed income exchange-traded funds have received $27.6 billion in inflows year to date, 15% greater than the amount of cash hitting their short-term counterparts.
"At these levels, we believe investors are adequately compensated for long-term inflationary risk, given many EM central banks target ~3% inflation," the firm noted.
Persons:
US3M
Organizations:
BlackRock, Federal Reserve