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"For example, during Trump's previous administration, deregulation in the energy sector boosted oil and gas stocks, benefiting energy ETFs." Aggregate Bond ETF (AGG) and Vanguard Total Bond Market Index Fund ETF (BND), two of the world's largest bond ETFs, and longer-term funds like iShares 20+ Year Treasury Bond ETF (TLT). Crypto ETFS having big year and getting bigger Since launching in January, crypto ETFs have attracted roughly $70 billion in assets, one of the most successful ETF launches ever. Bitcoin ETFs including the iShares Bitcoin Trust (IBIT), the largest bitcoin ETF by assets under management, have seen significant inflows since October. Rosenberg at Texas Capital acknowledges that certain ETF sectors, like industrials ( Vanguard Industrials Index Fund ETF , or VIS; iShares U.S. Industrials ETF , or IYJ), "could be hurt by more tariffs."
Persons: Trump, Tom Lydon, John Davi, iShares Russell, ROE, Matt Bartolini, Bartolini, Gavi, Edward Rosenberg, Gary Gensler, Michael Novogratz, Cathie Wood, Todd Sohn, Wood, Davi, Rosenberg, industrials Organizations: Astoria, CNBC, Potential Trump, Bank ETF, Assets ETF, Trump, ETF Research, Street Global Advisors, Regional Bank ETF, Treasury, Aggregate Bond, Vanguard, Fund, Treasury Bond ETF, Texas, SEC, Commodity Futures, Galaxy Digital Holdings, ARK, Innovation, ARKK, Downside, China ETF, Texas Capital, Index, Industrials, U.S, Edge Locations: Astoria, Congress, rulemaking, Coinbase, China, Mexico
Investors have been heavily buying two very different categories of assets ahead of next week's election: bonds and bitcoin . Bank of America credit strategist Yuri Seliger highlighted a shift toward bond buying among fund investors over the past week. A look at the list of most popular ETFs on FactSet over the past week shows that the demand for bonds has been broad across categories. Funds for investment grade corporate bonds, municipal bonds, mortgage backed securities, long-term Treasury bonds and high yield bonds are all in the top 20 funds by inflows over the past week. The iShares Bitcoin Trust ETF (IBIT) has raked in more than $2 billion of inflows over the past week, according to FactSet.
Persons: Yuri Seliger, Seliger, outflows Organizations: Bank of, HG, HY, Bank of America, , JPMorgan
"We believe the recent back up in rates is probably the last best opportunity to extend duration," wrote Gargi Pal Chaudhuri, chief investment and portfolio strategist, Americas, at BlackRock. Generally speaking, the value of a bond goes up as interest rates go down, with longer-dated bonds seeing the biggest gains. While bond funds have been seeing inflows this year, there are still plenty of investors with excess cash in short-term accounts. Different funds that offer that type of exposure include the iShares 3-7 Year Treasury Bond ETF (IEI) , the SPDR Portfolio Intermediate Term Treasury ETF (SPTI) and the Vanguard Intermediate-Term Treasury ETF (VGIT) . Investors shouldn't go overboard with adding duration, because the long-term bonds on the market carry extra risk, Akullian said.
Persons: BlackRock's, Gargi Pal Chaudhuri, Kristy Akullian, It's, Akullian, Investors shouldn't Organizations: Treasury, Federal, Investment Company Institute, BlackRock, CNBC, Treasury Bond ETF, Research, Investors Locations: Americas, BlackRock, US10Y
The price of bond funds like TLT move in the opposite direction of bond yields, meaning lower prices equal higher yields. TLT 1M mountain The iShares 20+ Year Treasury ETF has fallen for eight straight trading sessions. Only two of the trading sessions have seen a decline of more than 0.5%. One of the TLT's main competitors, the Vanguard Long-Term Treasury ETF (VGLT) , also fell for eight-straight trading sessions. The iShares 1-3 Year Treasury Bond ETF (SHY) has only fallen in five of the past eight sessions, for example.
Persons: Jason Goepfert Organizations: U.S . Treasury, Treasury Bond ETF, Treasury, Federal, White Oak Consultancy
Long-term yields might be the best bond investment this year, according to one exchange-traded fund expert. "The iShares 20-year Treasury ETF (TLT ) will get the biggest bang for its buck [and] some of the intermediate-term products like the Vanguard Intermediate-Term Corp Bond (VCIT ) will get some bang for the buck," VettaFi's Todd Rosenbluth told CNBC's "ETF Edge" on Monday. Rosenbluth added that while the short-term products were very popular last year, they will "largely tread water or earn a little more than their overall income." The firm's head of research reasons that if the Federal Reserve cuts interest rates more than expected then investors should stay in longer-term products to benefit. "We saw a lot of money start to move out of the short end of the curve into intermediate duration," said Slavin, the company's global head of ETFs.
Persons: VettaFi's Todd Rosenbluth, CNBC's, Rosenbluth, BNY Mellon's Benjamin Slavin Organizations: Treasury, Corp, Federal Reserve
The 10-year Treasury yield started the new year trading around 3.8% after a steep decline in late 2023. Against this backdrop, CNBC Pro asked three strategists and money managers how they would allocate $50,000 with yields rising again. Specifically, he recommended bills with a three- to six-month maturity, which investors can gain exposure to through exchange-traded funds such as the Vanguard Short-Term Treasury ETF (VGSH) or SPDR Portfolio Short Term Treasury ETF (SPTS) . Exchange-traded funds that offer exposure to these assets include the iShares 20 Plus Year Treasury Bond ETF (TLT) and Vanguard Intermediate-Term Corporate Bond ETF (VCIT) . Invest in dividend-growing value stocks Newton Investment Management's John Bailer recommended investors solely allocate into value stocks with sustainable and growing dividends.
Persons: Kumar, VGSH, VCIT, John Bailer, JPMorgan Chase, They've, they've, Bailer, Northrop Grumman, James Abate, Abate, Johnson, Geoff Martha, Colgate's Organizations: Treasury, Nasdaq, Dow Jones, CNBC Pro, Sri, Kumar, CNBC, AAA, Exchange, Treasury Bond ETF, Vanguard, Stock Market, U.S, Bloomberg, Newton Investment, JPMorgan Chase, JPMorgan, Northrop, Asset Management, Johnson, Colgate, Palmolive Locations: Bailer's
Investors poured cash into these fixed income ETFs in 2023
  + stars: | 2024-01-09 | by ( Darla Mercado | Cfp | ) www.cnbc.com   time to read: +6 min
The Federal Reserve's monetary policy set the tone for the fixed income world in 2023 – right down to which exchange traded funds investors picked to take advantage of higher interest rates. Bond yields have an inverse relationship to their prices, so that when prices decline, yields rise and vice versa. The Vanguard Long-Term Treasury ETF (VGLT) was another favorite of investors, with about $7.3 billion in net flows in 2023. Indeed, those strategies proved popular with investors in 2023, as the Vanguard Total Bond Market ETF (BND) and iShares Core U.S. Aggregate Bond ETF (AGG) were ETFs with the second and third highest net flows, per Morningstar.
Persons: It's, Paul Olmsted, Matthew Bartolini, Olmsted, Morningstar, , it's, BND, AGG Organizations: Investors, Bloomberg Finance, State Street Global Advisors, Morningstar, SPDR, SPDR Americas Research, Street Global Advisors, State, Treasury Bond ETF, Bloomberg, SGOV, SEC, Treasury, Fed, Vanguard, Bond Market, Core, Aggregate Bond Locations: SPDR Americas, Central
Investors will be able purchase pieces of corporate bonds, Treasurys and eventually, municipal bonds. The idea is to open up opportunities to investors who don't want to spend upward of $1,000 on single corporate bonds. While retail investors can buy individual corporate bonds through brokerages, they often opt for mutual funds or exchange-traded funds, which offer baskets of diversified bond securities. The iShares Broad USD Investment Grade Corporate Bond ETF (USIG) , for instance, tracks the ICE BofA U.S. Corporate Index. For corporate bonds, he suggests looking at actively managed funds, particularly for noninvestment grade and municipal bonds.
Persons: Sam Nofzinger, Nofzinger, Chuck Failla, I'm, Tom Kaiser, Failla Organizations: Public, Corporate, ICE, Sovereign Financial Group, Brock Investment Advisors, Apple, Microsoft, BlackRock Locations: brokerages, TreasuryDirect
After being on the market for more than a decade, defined maturity bond funds are finally attracting attention. Traditional open end, bond mutual funds or bond ETFs, on the other hand, have no maturity date. One big advantage over owning individual bonds, however, is that defined maturity ETFs are easy to purchase on the stock exchange. How they work Each defined maturity bond fund holds securities in the same sector that come due in the calendar year chosen for the fund. Callable bonds are simply those that can be redeemed or paid off by the issuer prior to the bonds' maturity date, according to the Securities and Exchange Commission.
Persons: Charles Rotblut, Bonds, Sarajat Samant, Karen Veraa, BlackRock's, , Veraa, IBonds, Invesco, Treasury iBond, Jason Bloom, Invesco's Bloom, haven't, I'm, BlackRock's Veraa, Morningstar's, Samant, AAII's Organizations: Investors, American Association of, Treasury, BlackRock, Securities and Exchange Commission, Invesco Locations: BlackRock's iShares, U.S
2023: The year of chasing yield Investors historically chase after stock performance, but 2023 has been the year of chasing after yield performance. This year, the combined assets under management at money market funds grew to a record $6 trillion. There have been large inflows into short-term Treasury funds like the Vanguard Short-Term Treasury ETF (VGSH) and, surprisingly, even into long-term Treasury ETFs like the iShares 20+Year Treasury Bond ETF (TLT). Still, some think a large chunk of the money in short-term Treasuries and money markets is "scared money" and will be "sticky." Those institutional investors "Don't want any money in cash because it will lag behind the stock market," he told me.
Persons: Paul McCulley, they're, Mark Lehman, Eric Balchunas, Jeff Seyffart, Alec Young, Steve Sosnick, Jim Besaw, Besaw, Mike O'Rourke, JonesTrading, Matt Maley, Miller Tabak, Chris Murphy Organizations: Federal, CNBC, Citizens JMP Securities, Treasury, Treasury Bond ETF, Bloomberg, Schwab Money Fund, MapSignals, Interactive Brokers, Gentrust, UBS Locations: Susquehanna
Tax loss harvesting is a staple of year-end planning. Bonds are ripe for tax loss harvesting in the wake of the Federal Reserve's rate-hiking cycle. Consider that the longer-dated iShares 20+ Year Treasury Bond ETF (TLT) has a year-to-date total return of about -7.3%, while the shorter-term iShares Core US Aggregate Bond ETF (AGG) has a total return of roughly 0.7% in 2023, according to Morningstar. "Tax loss harvesting is a silver lining for some of the pain they've been feeling the last couple of years." Bonds and the wash sale rule To benefit from tax loss harvesting, investors must avoid violating the wash sale rule .
Persons: Bonds, Morningstar, Kristy Akullian, Jeffrey Levine, St . Louis, Levine, Jordan Naffa, Naffa, VGSH, Lisa, Kirchenbauer Organizations: Treasury Bond ETF, Bond, BlackRock, Internal, Strategic Wealth, Arista Wealth Management, Treasury, SEC, VGIT, Omega Wealth Management Locations: St ., Las Vegas, Arlington , Va
Technical strategist Katie Stockton said that recent stock gains have been "explosive." But falling bond yields should continue to provide a boost to stocks if the pullback persists. The surge in equities, Wilson explained, is mostly a consequence of falling bond yields. Key government bond yields have pulled back sharply from 16-year highs in recent weeks. She said signs flashing in the TLT Treasury ETF point to an extended period of bond yields correcting from recent highs.
Persons: Katie Stockton, Stockton, , November's, Morgan Stanley's Mike Wilson, Wilson, JPMorgan's Marko Kolanovic Organizations: Service, CNBC Wednesday, TLT Treasury Locations: Stockton, TLT
Returns from the Treasury market are growing more attractive with yields hovering near 5%, the highest since 2007. When the government has more trouble finding buyers for new Treasurys, yields will rise to attract interest. For instance, holders can't sell their bonds directly from a TreasuryDirect account. For greater access to the Treasury market, investors can turn to brokerages and some commercial banks, which act as the primary intermediaries of US debt. By using a broker to buy bonds in the secondary market, investors can also add Treasury assets into tax-free accounts, such as a Roth IRA.
Persons: , Matthew Liebman, Roth Organizations: Treasury, Service, Federal Reserve, Investing.com, Amplius Wealth Advisors, Bloomberg Locations: Brokerages, TreasuryDirect
The Janus Henderson AAA CLO ETF (JAAA) , which buys highly rated collateralized loan obligations, has grown rapidly this year and outperformed many popular bond ETFs. The fund has a 30-day SEC yield of 6.66%, putting it above the yield of U.S. Treasuries. JAAA YTD mountain The JAAA ETF has held up this year despite rising interest rates. There are other CLO ETFs on the market, including the BlackRock AAA CLO ETF (CLOA) that launched earlier this year, but JAAA is the largest. Given the size and depth of the AAA CLO market, the fund should have no problems operating until it is about $20 billion in assets, at least, he estimated.
Persons: Janus Henderson, John Kerschner, Kerschner, JAAA Organizations: Janus Henderson AAA CLO, SEC, CLOs, Treasury, Treasury Bond ETF, CNBC, JPMorgan AAA CLO, BlackRock AAA, AAA Locations: JAAA
The bond market is experiencing one of its worst declines on record after interest rates surged. AdvertisementAdvertisementOur Chart of the Day is from Bank of America, which highlights the painful decline experienced in the bond market over the past few years. The iShares 20+ Year Treasury Bond ETF has plunged as much as 47% from its 2020 peak, making the collapse worse than the 1981 bond bear market and on par with some of the worst market crashes in history. AdvertisementAdvertisementBut despite the pain, investors are pouring billions of dollars into bond funds, with high bond yields luring in a fresh wave of buyers. For the rout in the bond market to end — and for all of these bond fund buyers to make money — interest rates need to fall.
Persons: Organizations: Treasury ETF, Service, Bank of America, Treasury, Federal Reserve, America
"Retail investors are seizing opportunities from the rise in long-term government yields, albeit selectively. ... Retail purchases of TLT have reached unprecedented levels this past week. The takeaway is that retail traders have actually sought to buy this historic dip in one of the more popular Treasury ETFs," the note said. TLT 1M mountain The price of long-term bonds has fallen sharply over the past month, as shown by the TLT. If the move in rates calms, larger investors could come back to utilities as well, Vanda said.
Persons: Marco Iachini, Vanda Organizations: Vanda Research, Treasury Bond ETF, Retail, TLT, Utilities
Longer-duration Treasury prices have plunged in recent weeks, driving benchmark 10-year yields toward 5%. These charts show how the meltdown compares to previous market crashes, including the 2008 financial crisis. NEW LOOK Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. download the app Email address Sign up By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . AdvertisementAdvertisementUS bond prices have plummeted in recent weeks, turning what had already been a bad stretch into one of the market's worst-ever routs.
Persons: , iShares, Lehman Brothers Organizations: Service, Federal Reserve, Bloomberg –, Treasury ETF
Exchange-traded funds like the Vanguard Short-Term Treasury ETF (VGSH) and the SPDR Portfolio Short Term Treasury ETF (SPTS) also offer exposure. One way to gain exposure to the assets is through funds like the Schwab 5-10 Year Corporate Bond ETF (SCHI) or the iShares Euro Investment Grade Corporate Bond Index Fund (IE). Finally, Rieder said he likes corporate paper, which are essentially short-term bonds issued by corporations. I know what my return is going to be a year ahead — it's going to be 6.5% for single-A issuers. The BlackRock Ultra Short-Term Bond ETF (ICSH) and the Vanguard Short-Term Corporate Bond Index Fund (VCSH) offer exposure to corporate paper.
Persons: Rick Rieder isn't, Rieder, — it's Organizations: CNBC's, Alpha, Bureau of Labor Statistics, of Labor, Exchange, Treasury, Corporate, Index, BlackRock, Bond Locations: BlackRock, New York, Europe, United States
Trading data shows that retail investors are focused on funds that generate income and are relatively insulated from the moves in interest rates, the firm said in a note on Thursday. "As bond prices continue to drop we've seen a surge in Treasury ETF purchases from the retail community over the past week. Vanda also pointed out that gold stocks and ETFs have also been climbing in September, another sign of a defensive mindset for investors. Investors have been buying stocks, too, but in the form of broad market ETFs such as the SPDR S & P 500 Trust (SPY) rather than individual stocks, according to Vanda. "When the stock market is performing poorly, retail investors tend to favor these products because the equity market tends to rise in the long term, and as a result, the retracement offers a 'safe' upside potential.
Persons: Vanda, peters Organizations: Vanda Research, Market, Investors, Treasury
Treasury yields are spiking to levels not seen in over 15 years, causing sell-offs in many of the market's biggest bond funds. The iShares 20+ Year Treasury Bond ETF (TLT) closed at $89.18 on Monday, which was its lowest close since Feb. 10, 2011, according to FactSet. The Fed's target interest rate is already above 5%, as are short-term Treasury yields. But the long-term decline in bond yields began roughly two decades before that. That trend may finally have reached its turning point, Jim Grant, founder of Grant's Interest Rate Observer, said Tuesday on CNBC's " Squawk Box ."
Persons: Bruno Braizinha, Braizinha, Goldman Sachs, Cecilia Mariotti, Mariotti, Ajay Rajadhyaksha, Jonathan Krinsky, Jim Grant, Grant, BTIG's Krinsky Organizations: Treasury Bond ETF, iShares, Aggregate Bond, Treasury, Bank of America, Barclays, Federal
The 30-year Treasury yield was trading at 4.575% on Friday morning after hitting its highest level since 2011 on Thursday. US30Y YTD mountain The 30-year Treasury yield hit a new high for the year on Thursday. Ackman said he thinks 5.5% could be more the rational yield for the 30-year Treasury. The largest inverse bond ETF is the ProShares UltraShort 20+ Year Treasury ETF (TBT) , according to VettaFi. ProShares also has the Short 20+ Year Treasury ETF (TBF) , which is a one-times inverse fund.
Persons: Bill Ackman, Ackman, Ackman's, ProShares Organizations: Treasury, Reserve, Workers, ICE U.S, Pershing, Capital Management, CNBC, Alpha Locations: China
Another is the still-inverted Treasury yield curve, meaning yields on shorter-duration government bonds are higher than those with longer durations. Inversions of the 3-month and 10-year yields have preceded every recession since the 1960s without producing a false signal. The Vanguard Energy ETF (VDE) and the Energy Select Sector SPDR Fund (XLE) offer exposure to energy stocks. The Consumer Price Index, a main measure of inflation, rose to 3.7% year-over-year in August compared to 3.2% in July. Investors can gain exposure to short-term government bonds through TreasuryDirect, their brokerage, or through ETFs like the Vanguard Short-Term Treasury ETF (VGSH).
Persons: Marko Kolanovic, Kolanovic, Michael Feroli, Cash Organizations: for Supply Management, Bank of America, Federal Reserve, Treasury, Federal, Energy, Vanguard Energy Locations: China, TreasuryDirect
Hiccup in soft landing story Why are we hitting this string of down days? There's a hiccup in the soft landing story. That's causing a speed bump for stocks, particularly tech stocks, which are underperforming this month and this quarter. And despite poor economic news out of China, the macroeconomic environment in the U.S. remains strong and still supportive of a soft landing. At 19.2 times forward earnings, the S & P 500 is still richly valued.
Persons: Phil Camporeale Organizations: Silicon Valley Bank, Reserve, Nasdaq, Treasury, Federal Reserve Bank of, Morgan Asset Management, CNBC Locations: Silicon, China, U.S, Federal Reserve Bank of Kansas, Jackson Hole , Wyoming
A growing number of investors appear to be trying to squeeze additional cash from long-term bonds with the iShares 20+ Year Treasury Bond BuyWrite Strategy ETF (TLTW) . "Popular Treasury ETFs, such as [iShares 7-10 Year Treasury Bond ETF ] and [ iShares 20+ Year Treasury Bond ETF ], could lose another 4-8% if yields spike by the end of September," Woodard said. The TLTW presents a strategy to thread the needle and offset declines in bond prices with income from selling call options. The fund works by buying the iShares 20+ Year Treasury Bond ETF (TLT) and then selling call options with strike prices roughly 2% above the market price of the underlying fund. The TLTW also comes with a higher cost than vanilla Treasury funds.
Persons: Bond, , Jared Woodard, Woodard, iShares, Steve Laipply, TLT, Laipply Organizations: Federal, Bank of America, Treasury, ETF, Treasury Bond ETF, BlackRock, SEC
Investors appear to be growing more comfortable with the path for interest rates and are shifting their fixed income bets accordingly. The list of the most popular bond funds by inflows in recent weeks is dominated by large passive funds. The iShares 20+ Year Treasury Bond ETF (TLT) and Vanguard Intermediate-Term Treasury ETF (VGIT) have both been two of the 10 most popular ETFs of any type over the past month, according to FactSet's flow data. The iShares 3-7 year Treasury Bond ETF (IEI) and the Vanguard Intermediate-Term Bond ETF (BIV) have also seen sizable inflows recently. Broad bond funds will often have longer duration than short-term funds, even if there is no reference to time frame on the label.
Persons: Scott Chronert, Fitch, — CNBC's Michael Bloom Organizations: Citi, Federal Reserve, Treasury Bond ETF, Treasury, Bond ETF, Bond Locations: outflows
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