Wednesday, 27 July 2022 04:19

Short Duration Bond ETFs for Interest Rate Hedge

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The ultra-low duration ETFs are gaining a lot of traction right now, mainly because there are many near retirement looking for a safe place to store their funds during this bout of volatility. Pimco Enhanced Short Maturity Active ETF, Pimcos Short Maturity Active ESG ETF, Vanguards Short-Term Corporate Bond ETF, and Short-Term Treasury ETF are among the highest rated ultra-short duration ETFs according to morningstar. Active ETFs have an advantage over indexed according to many in a macro environment like the ones we are seeing. Additionally, the most significant advantage of the ultra-short duration is they minimize interest rate risk. As the Fed tightens that raises yields and lowers prices, shorter-duration ETFs are less sensitive to this movement.

Finsum: It's hard to not see bonds at the bottom of their value currently, they are really into the buying territory. 

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