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Bonds are starting to make a lot of sense for investors, Forrest said. Even after pulling back somewhat from those levels, the benchmark yield remains within striking distance of the key 5% threshold. The potential unwinding of what BofA recently called the "greatest bond bear market in history" has more investors trying to lock in higher yields ahead of potential rate cuts next year from the Federal Reserve. 'A lot for us to love bonds' Other investors are building out their bond exposure. The Vanguard Total Bond Market ETF (BND) is off by more than 2% in 2023, but greater than 1% on the week.
Persons: Kim Forrest, she's, Forrest, Bonds, Treasurys, Forrest isn't, Nancy Tengler, She's, , Tengler, Bryce Doty, Emily Roland, CNBC's, I've, Roland, we've, Lawrence Gillum, Bokeh Capital's Forrest, Sit Investment's Doty, LPL Financial's Gillum, Gillum, Sit's Doty, Doty Organizations: Bokeh Capital Partners, Bank of America, Treasury, Federal Reserve, Laffer, Sit Investment, John Hancock Investment Management, LPL, Bloomberg, Bond, Aggregate Bond, Bond Market, Corporations Locations: U.S, Israel
The S & P 500 bottomed out on October 12 last year with a close of 3,577. Lopsided gains While the S & P has seen healthy gains off the bottom, the gains have been lopsided. He counts 11 periods of notable non-recession declines in the S & P 500 since WWII. Money keeps pouring into short-term bonds and money market funds For the first time in decades, bonds and money markets are serious competitors for stocks. A lot of people seem very content to leave money in 5% money market funds, perceiving little risk/reward in owning stocks.
Persons: Russell, Todd Sohn, Strategas, Covid, Sohn, Sam Stovall, Sam Organizations: Growth, CFRA Research, U.S .
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
That's the steepest one-day decline the 10-year Treasury yield has seen since the implosion of SVB in early March, when banking turmoil led investors to flock to US debt in search of safety. The 10-year Treasury yield continued to slide early Wednesday, trading around 4.577%. AdvertisementAdvertisementInvestors were pushed to sell US Treasuries last week amid rising fears over the US debt balance and higher-for-longer interest rates. The 10-year Treasury yield briefly touched a 16-year-high, capping one of the worst selloffs in market history. Meanwhile, several Fed officials delivered dovish comments on the outlook for interest rates this week, which perked up market sentiment.
Persons: SVB, , Raphael Bostic Organizations: Treasury, Investors, Service, Silicon Valley Bank, Federal Reserve, Hamas, Atlanta Fed Locations: Silicon, Israel, Friday's
High yield bond funds tout sweet yields, but swirling concerns around the economy are spurring questions on how much longer the income party will last. Consider that the 30-day yield on the SPDR Bloomberg Short Term High Yield Bond ETF (SJNK) is 8.78%. Indeed, the Morningstar U.S. high yield bond index has a year-to-date total return of 4.61%, compared to the -1.29% total return on Morningstar's U.S. corporate bond index . Consumers are also a focal point when it comes to the economic outlook, according to Peter Higgins, head of fixed income and senior fixed income portfolio manager at Shelton Capital Management. Being selective about risk UBS is neutral on high yield overall, but positive on short-dated high yield paper of good quality companies.
Persons: Paul Olmsted, Olmsted, Alina Golant, Golant, Peter Higgins, Dow Jones, Shelton's Higgins, Morningstar's Olmsted, Michael Bloom Organizations: Investors, Federal Reserve, Morningstar U.S, Morningstar's, Morningstar, UBS, Shelton Capital Management
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., September 28, 2023. But late in the afternoon, a senior Hamas official said the group is open to discussions over a possible truce with Israel. A recent surge in U.S. Treasury yields had pressured equities. Shares of the airlines, also hurt by rising oil prices, putting pressure on the S&P 500 Passenger Airlines index (.SPLRCALI). Exchange-traded funds exposed to Israel were selling off, with iShares MSCI Israel ETF falling along with the ARK Israel Innovative Technology ETF .
Persons: Brendan McDermid, Joe Biden, John Augustine, Augustine, Big advancers, iShares, Sinéad Carew, Shashwat Chauhan, Ankika Biswas, Arun Koyyur, Shounak Dasgupta, Richard Chang Organizations: New York Stock Exchange, REUTERS, Hamas, U.S, Federal, Huntington National Bank, Columbus, Peoples, Treasury, Fund, Nasdaq, Dow Jones, United Airlines, Delta Air Lines, American Airlines, Airlines, Defense, Aerospace, Northrop Grumman, L3Harris Technologies, Exchange, ARK Israel Innovative Technology ETF, Thomson Locations: New York City, U.S, Israel, Palestinian, Gaza, Columbus , Ohio, Tel Aviv, New York, Bengaluru
BlackRock global fixed income CIO Rick Rieder said Friday that this year's bond market volatility has created opportunities to buy high quality yields on the cheap. The result is his new fund outperforming some of the biggest bond ETFs during the most recent sell-off. Aggregate Bond ETF (AGG) and 2.2% for the Vanguard Total Bond Market ETF (BND) , the two biggest bond ETFs. BINC 1M mountain BlackRock's BINC has held up better than major bond ETFs over the past month. "I think what people underestimate is the long end of the bond market, the 30-year Treasury, is about the same volatility as the stock market," he said.
Persons: Rick Rieder, Rieder, We've Organizations: BlackRock, Rieder, Aggregate Bond, Vanguard, Bond Market, CNBC, Treasury, Corporate Bond Fund, Fed, AAA, Mortgage, SEC Locations: BlackRock, Mexico, Brazil, Japan, iShares, United States, U.S
The list of top-performing exchange-traded funds since Sept. 19 — the day before the Federal Reserve released new projections that showed fewer rate cuts in 2024 — is dominated by leveraged and leveraged inverse products. The performance and increased interest shows that the inverse funds are doing their jobs, but there are important caveats for investors to know. The universe of inverse and leveraged inverse funds has grown widely, including sector-specific funds and even some single-stock products. Of course, the leveraged inverse funds can suffer massive losses if the market rebounds. Ullal also pointed out that some inverse products are technically exchange traded notes, not ETFs, which can introduce some credit risk in a trade.
Persons: Mohit Bajaj, Direxion's TMV, Bajaj, Aniket Ullal, Ullal Organizations: Federal Reserve, Bloomberg, Oil ETF, SCO, Nasdaq, Treasury, Treasury Bond ETF, U.S . Securities, Exchange, Bajaj, CFRA Research
"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
The U.S. is headed for a major debt crisis due to its fiscal deficit being at the "worst structural point since World War II," according to value investor Matthew McLennan. Over the past two decades, the federal government had its smallest budget deficit of $0.16 trillion in 2007, just before the global financial crisis. The hedge Given his bearish view, McLennan prefers gold as an investment hedge. Stocks Beyond gold, McLennan said he sees value in stocks like Meta and Oracle , two of the top equity holdings in the Global Fund. McLennan said his fund has owned Oracle since it launched an AI-powered database five years ago.
Persons: Matthew McLennan . McLennan, McLennan, hasn't, it's, you've, Meta, OpenAI Organizations: Global Fund, Security, Treasury, Meta, Oracle, Nvidia, Microsoft Locations: U.S, United States
The 10-Year US Treasury yield is arguably the most important thing to watch right now for investors. The 10-Year yield has soared to levels not seen since 2007, and that's having a big impact on stock prices. Here's what you need to know about what bond yields are doing to markets and the economy. Rising bond yields are also thrashing the bond market, as bond prices fall when yields rise. AdvertisementAdvertisementHigher interest rates also means higher credit card rates, leading to a rise in delinquencies in recent months.
Persons: , It's, Ray Dalio, Bill Ackman, Bill Gross, JPMorgan's Marko Kolanovic, Kolanovic Organizations: Treasury, Service, Treasury Bond ETF, Fed, Pershing, CNBC Locations: delinquencies
BlackRock stock has slumped nearly 12% in 2023. BLK YTD mountain BlackRock stock. Treasury yields have soared in recent days , with the 10-year climbing to its highest level in 16 years, rattling equity markets. The yields on 30-year Treasury bonds, meanwhile, briefly traded above 5% on Wednesday. BlackRock is the biggest asset manager in the world, with more than $9.4 trillion through the end of the second quarter.
Persons: Craig, Siegenthaler, BofA, — CNBC's Michael Bloom Organizations: Bank of America, BlackRock, Treasury, Wednesday Locations: BlackRock, 4Q23
Dozens of stocks and ETFs are hitting 52-week lows on the relentless rise in interest rates. Treasury bond ETFs: New lows iShares 1-3 Year Treasury Bond ETF (SHY) iShares 7-10 Year Treasury Bond ETF (IEF) iShares 10-20 Year Treasury Bond ETF (TLH) iShares 20+ Year Treasury Bond ETF (TLT) It's not just Treasury bonds. Broad bond ETFs: New lows Vanguard Total Bond Market ETF (BND) iShares Core US Aggregate Bond Fund (AGG) Higher rates are affecting other areas of the U.S. economy: look at clean energy and biotech It's simple. Clean energy ETFs: New lows iShares Global Clean Energy (ICLN) VanEck Low Carbon Energy ETF (SMOG) Invesco WilderHill Clean Energy ETF (PBW) Invesco Solar ETF (TAN) It's the same story with biotech. The SPDR S & P Biotech ETF (XBI) , which tracks an equal-weighted index of US biotechnology stocks, is at a 52-week low.
Persons: Schwab, It's Organizations: Vanguard Utilities, Treasury Bond ETF, Bond Market, Bond Fund, NextEra Energy Partners, Clean Energy, Carbon Energy, P Biotech, Biotechnology, Biotech, Verizon, SPDR Telecom, AT, Property, Comerica, Huntington Bancshares Locations: U.S, Orsted, Denmark, REITs
The actively managed fund, which trades under the ticker FBND, has a 30-day SEC yield of 5.41%, according to Morningstar. FBND's total return year to date is -0.83%, as of Monday, according to Morningstar , which gives the fund four-stars. It has a trailing 5-year total return of 0.87%. So on a risk-adjusted basis, it's really, really strong," he added. When rates started to go up, the team bought the long end of the Treasury yield curve.
Persons: Morningstar, It's, Mike Mulach, Celso Muñoz, we've, Muñoz, Ford O'Neil, we'll Organizations: Fidelity, Bond, SEC, Morningstar, Bloomberg, Bond Funds, Muñoz, Federal National Mortgage Association, National Mortgage Association, Bank of America, Treasury, Federal Locations: outperformance
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
Ether futures ETFs hit the market
  + stars: | 2023-10-02 | by ( ) www.cnbc.com   time to read: 1 min
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailEther futures ETFs hit the marketSimeon Hyman, head of investment strategy group at Proshares, and Bryon Lake, global head of ETF solution at JPMorgan Asset Management, join 'Halftime Report' to discuss three new ETFs coming to market today, the investor appetite for crypto ETFs, and the case for buying investment grade bond ETFs.
Persons: Simeon Hyman Organizations: JPMorgan Asset Management
REUTERS/Cagla GurdoganDaily retail investor flows into the benchmark iShares 20+ Year Treasury Bond ETF touched their highest level last week since March 2020, according to data from Vanda Research. The fund saw net retail inflows rise to $1.2 billion so far this quarter, Vanda’s data showed, even as prices slid to their lowest level since 2010 amid a sharp rise in yields. The ETF saw retail net inflows of nearly $746 million in the second quarter. The iShares 20+ Year Treasury Bond ETF is down 13.3% in the third quarter and has fallen 10.4% year-to-date. Overall, the ETF saw nearly $3.9 billion in net inflows so far this quarter, according to Lipper data, slowing from nearly $6 billion last quarter but still on track to post its ninth straight quarter of inflows.
Persons: , Noel Archard, Ihor Dusaniwsky, Dusaniwsky Organizations: Reuters, Federal, REUTERS, Treasury, Vanda Research, Partners Locations: Ankara, Turkey
"There is a subset that simply cannot do that," she said of paying down credit card debt going forward as rates rise. "In those tails and subsets I think you're going to have really unusual delinquencies, and just horrible recovery rates." You're going to see defaults increase." Delaney also emphasized being defensive, and said he likes corporate bonds, but those with floating rates, meaning they move with the market rate. The iShares 10-20 Year Treasury Bond ETF (TLH) is one way to gain exposure to long-term government bonds.
Persons: Dawn Fitzpatrick, Katie Koch, haven't, it's, Mark Delaney, Suni Harford, I'd, Brad Gerstner, Jerome Powell, Volcker, Koch, , We're, Rick Rieder, he's, Delaney, Fitzpatrick Organizations: CNBC's, Alpha, Federal Reserve, Soros Fund Management, TCW, UBS, Management, BlackRock, JPMorgan, Corporate, Treasury Bond ETF, Vanguard Energy, DB Oil Fund Locations: Europe, Saudi Arabia
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailInflows to bond ETFs on the rise: Strategas Securities' Todd SohnTodd Sohn, Strategas Securities ETF and technical strategist, joins 'The Exchange' to discuss sentiment trends in the ETF market, volatility in overbought bond ETFs, and interest rate pressures hurting regional banks.
Persons: Todd Sohn Todd Sohn Organizations: Strategas Securities
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
One-year Treasury note yields are about a percentage point higher than those on 10-year bonds. That has meant global investors can avoid the relatively less liquid, longer-tenure bonds just for the sake of extra yield and premium. LSEG Lipper data shows U.S. short-term bond funds have outperformed this year, delivering a gain of 2.2% in price terms compared with an average 2.1% dip in long-term bond funds. Most analysts expect short-term bond funds to continue to lure more money in the months ahead. "We are anchoring portfolios with the higher yielding short-term bonds.
Persons: Dado Ruvic, Adam Coons, SPDR, MATURITIES, Matt Dmytryszyn, Jeff Klingelhofer, Klingelhofer, Winthrop's Coons, Patturaja Murugaboopathy, Gaurav Dogra, Vidya Ranganathan Organizations: REUTERS, Morningstar, Treasury, Reuters, Winthrop Capital Management, Federal Reserve, SPDR Bloomberg, Thornburg Investment Management, Thomson Locations: Telemus, Bengaluru
Schwab slashes fees on more fixed income ETFs
  + stars: | 2023-09-25 | by ( Suzanne Mcgee | ) www.reuters.com   time to read: +1 min
REUTERS/Lee Jae-Won/File Photo Acquire Licensing RightsSept 25 (Reuters) - Schwab Asset Management on Monday said it cut fees on the Schwab High-Yield Bond ETF (SCYB) and the Schwab U.S. That brings the fees for those products to the same level as its other fixed income ETF products. State Street slashed fees on ten SPDR ETFs in August, including that high-yield bond product. Schwab doesn't want these low-cost ETFs to end up as loss leaders for the company's array of asset management products, Bostet said. Schwab has nearly $300 billion in ETF assets under management, out of more than $920 billion managed by Schwab Asset Management overall.
Persons: Lee Jae, David Botset, Bostet, Schwab doesn't, Schwab, Suzanne McGee, Sonali Paul Organizations: REUTERS, Schwab Asset Management, Schwab, Bond, Management, Thomson Locations: Seoul, Schwab U.S
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
That appears to be pushing investors into an exchange-traded fund with some built-in cushion against higher rates. The fund buys and holds loans made by banks and other financial institutions, which often have floating interest rates. For comparison, the iShares 3-7 Year Treasury Bond ETF (IEI) has a total return of about -0.2%. The Vanguard Total Corporate Bond ETF (VTC) has a total return of less than 1% year to date. If the Fed were to cut rates, the BKLN would likely underperform and see its payouts decrease.
Persons: isn't Organizations: SEC, Treasury Bond ETF, Corporate Bond, Treasury
Should I Ditch Bonds for Money-Market Funds or CDs?
  + stars: | 2023-09-11 | by ( Steve Garmhausen | ) www.wsj.com   time to read: +5 min
By Steve GarmhausenIs it reasonable or even wise to shift some of your bond allocation to money-market funds paying over 5%? The broad bond market had its worst year ever in 2022, as reflected by the AGG—the iShares Core U.S. Bonds vs. money-market fundsSo should you really sell bonds and use the proceeds to buy these products? Bonds have also performed better historically than the “cash” category, which includes money-market funds. Money-market funds are considered a low-risk investment, and one that’s easy to sell if you need cash.
Persons: Steve Garmhausen, Bonds, Amita Desai, , Adrianne Yamaki, Brent Weiss, Aswath Damodaran, Weiss, you’ve, Yamaki Organizations: Aggregate, Federal Reserve, Money Market Fund, Treasury, New York University Locations: Demarest, N.J, San Francisco, Baltimore, , New Jersey
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