As default rates among low-rated U.S. companies dropped to their lowest level in months, fixed income investors have grown more “risk-on.” The iShares iBoxx $ High Yield Corp Bond ETF (NYSEArca: HYG) increased 0.9% year-to-date while the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) fell 4.8%.
As Treasury bond yields continue to tick higher, puts corporate bonds may be in a bind as fixed income investors increasingly opt for government bonds with less default risk. As the market continues to decide whether it wants to continue past its pre-pandemic levels or languish further, investors can get quality corporate bond exposure with assets like the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) .
On Wednesday, State Street Global Advisors, the asset management business of State Street Corporation ( STT ), announced the launch of the SPDR Bloomberg Barclays Emerging Markets USD Bond ETF ( EMHC ). The fund was developed to provide exposure to US dollar-denominated debt issued by sovereign and quasi-sovereign emerging market issuers.
Fixed income investors who want to surf the rising tide of interest rates should keep the VanEck Vectors Investment Grade Floating Rate ETF (FLTR) in their toolbox. FLTR can be used in tandem with a fixed income portfolio as a hedging component against rising yields.
Rising Treasury yields are still a daunting consideration for advisors, a scenario could be in play longer than many would like. The WisdomTree Fixed Income Model Portfolio can help advisors deal with rising rates, potentially improving clients’ fixed income outcomes in the process. “This model portfolio is focused on a diversified stream of income.
As inflation fears make another round through the markets, yields have jumped and dragged down Treasury bond exchange traded funds. On Thursday, the iShares 7-10 Year Treasury Bond ETF (IEF) fell 0.6% and the iShares 20+ Year Treasury Bond ETF (NasdaqGS: TLT) declined 1.0%.
On Wednesday, the Federal Open Market Committee ( FOMC ) signaled interest rates will remain low for the foreseeable future. That means advisors and clients will continue facing challenges when it comes to generating income, but the WisdomTree Fixed Income Model Portfolio can help ease the income burden. “This model portfolio is focused on a diversified stream of income.
Benchmark Treasury yields may be on the rise, but fixed income investors don’t have to fret when funds like the VanEck Vectors Investment Grade Floating Rate ETF (FLTR) can help keep them afloat. “Fixed-income investors are in a tough spot.
An emerging credit spread scenario could highlight opportunity with funds like the FlexShares High Yield Value-Scored Bond Index Fund ( HYGV ). HYGV’s index reflects the performance of a broad universe of U.S.-dollar denominated high yield corporate bonds that seeks a higher total return than the overall high yield corporate bond market, as represented by the Northern Trust High Yield US Corporate Bond IndexSM.
Speculative-grade junk bond ETFs are enjoying huge inflows as fixed income investors seek out riskier assets to generate significant yield. On Wednesday alone, the iShares iBoxx $ High Yield Corp Bond ETF (NYSEArca: HYG) attracted $1.3 billion in net inflows, marking its second-biggest single-day inflow ever, Bloomberg reports.
To say it’s getting difficult to navigate today’s fixed income market is something of an understatement. However, advisors can build an effective plan of attack with the WisdomTree Fixed Income Model Portfolio. “This model portfolio is focused on a diversified stream of income.
Seasoned fixed income investors know that the lower they go in terms of credit quality, the higher the risk profile they take on. The FlexShares Credit‐Scored US Corporate Bond Index Fund (NasdaqGM: SKOR) is one avenue for combating this risk, and it’s a good idea to consider in the current bond climate.
Despite a recent spike in bond yields, bond ETFs pulled in net inflows of $13 billion in the past month. While it’s sharply lower than the $79 billion cash haul for equities, we view the persistent demand as indicative of growing comfort in the asset category.