BlackRock has launched the BlackRock Total Return ETF (BRTR) on Nasdaq, managed by top experts. The ETF aims to exceed the Bloomberg U.S. Aggregate Bond Index returns. It offers a diversified core bond strategy, seeking consistent, attractive returns in all market cycles. This move follows the successful launch of the BlackRock Flexible Income ETF (BINC).
BondBloxx introduced three BBB-rated corporate bond ETFs targeting different maturity ranges. They track market-value-weighted indexes, offer 0.19% expense ratios, and aim to capture the potentially higher returns of BBB-rated bonds. BondBloxx also emphasizes the growing demand for fixed income ETFs and its focus on providing precise exposures to the bond market.
The U.S. economy defied expectations of a 2023 recession and is projected to remain resilient in 2024. Fixed income investments rebounded with significant returns. BondBloxx’s sector-specific high yield bond funds and EM sovereign debt ETF offer precise exposure for investors. The company, with over $2.6 billion in assets, is praised for innovative fixed income ETFs.
Municipal bonds, or “munis,” are favored by high tax bracket investors seeking steady income with tax advantages. These bonds fund public projects and offer tax-free interest at federal and sometimes state and local levels. While relatively safe, they present lower yields and potential liquidity issues. Understanding their tax benefits, risks, and suitability is key.
Vanguard has introduced two new municipal bond ETFs, VTEI and VTEC, with low expense ratios and tax benefits. With a focus on intermediate exposure, these funds offer attractive yields while maintaining credit quality and minimizing tax burdens. Vanguard’s experienced management team provides expertise in navigating the complex municipal bond market, making these ETFs a strong investment option.
Investors, fearing falling yields due to lower interest rates, are turning to emerging markets bonds. Despite the risk, analysts praise the sector’s positive progress, spurred by the anticipated easing of Federal Reserve monetary policy. The shift of sentiment is especially significant with the declining dollar. The Vanguard Emerging Markets Government Bond Index Fund ETF Shares provides easy accessibility to this sector and comes with a yield of 7.26%.
Following a tumultuous 2022, this year has been better, though not entirely sanguine for fixed income investors. 2024 is right around the corner, and expectations
The bond market is rallying, with the yield on the 10-year Treasury note dropping to 4.26%, marking a major turnaround after a challenging year. This comes as investors anticipate the end of the Federal Reserve’s rate-tightening cycle. Factors such as a moderating labor market and a forecast for a milder GDP report have contributed to this shift. Bond traders now expect the Federal Reserve to start cutting rates, with these changes influencing future investment strategies.
The bond market witnessed its best month in almost 40 years in November due to a shift in yields. Hafiz Noordin, VP and Director for Active Fixed Income Portfolio Management at TD Asset Management, attributes the strong performance to missed inflation targets and slightly weaker labor market data. The disinflationary trend could potentially continue into next year, hinting at a favorable environment for bonds.
Treasury yields have reached a 15-year peak due to the Fed’s significant rate hikes. Amid market instability and interest rate volatility, BondBloxx, a fixed income investment manager, offers assistance with diverse strategies. It provides eight U.S. Treasury ETFs targeting different Treasury durations. BondBloxx, launched in October 2021, currently supervises over $2 billion in assets across U.S.-listed ETFs.
While fears of a looming recession persist, treasury ETFs could provide the portfolios with a cushion against any economic downturns. With most treasuries yielding around 5%, BondBloxx, which offers eight duration-specific U.S. Treasury ETFs, could be a helpful instrument. BondBloxx, hailed as “innovative” in fixed-income ETF provision, currently manages over $2 billion across 20 U.S-listed ETFs.
The VanEck Emerging Markets High Yield Bond ETF (HYEM) offers investors a 6.5% yield and potential for dividend growth. Despite mediocre returns amid rising market interest rates, the fund has outperformed most of its peers due to its strong dividends. As interest rates stabilize, performance and dividends should improve. The fund’s high-yield characteristic does present risks, but its diversified exposure across various emerging markets balances out the risk factor.
The Vanguard Short-Term Corporate Bond Index ETF (VCSH) provides diversified exposure to short-term, investment-grade corporate bonds. Despite being a solid investment, VCSH is slightly less diversified and riskier than other ETFs like Janus Henderson AAA CLO ETF (JAAA). While it offers a higher income, VCSH underperforms in comparison to JAAA, which offers stronger dividends, higher credit quality, and lower interest rate risk. The investment decision hinges on future Federal Reserve policy actions.
The US Treasury 12 Month Bill ETF (OBIL) allows investors to access T-Bills without having a Treasury account, offering stable returns and high liquidity through a focus on the 12-month T-Bill. OBIL mirrors the yield performance of the ICE BofA US 12-Month Treasury Bill Index, rolling into the latest issue each month. It carries no credit risk, but potential investors should be aware of the interest rate risk and lack of diversification due to its single asset focus.
