Displaying items by tag: yields

Tuesday, 16 March 2021 18:41

How to Hedge Against Rate Risk

(New York)

Yields have been moving all over the place. And while there are daily moves higher or lower, there is a definitive bias towards sharp moves upward. Accordingly, investors need to be thinking about rate hedging. Investors are in a tough place as Treasury yield rises have been causing losses, but the bonds themselves still don’t have high enough yields to be attractive. With that in mind, there are a couple ways investors can go about protecting themselves. Firstly, they can buy floating rate bond-focused ETFs, which give protection but have very low yields. The other opportunity is to buy into bond funds that access riskier corners of the markets, where yields are much higher and durations are shorter, giving less rate sensitivity.


FINSUM: Our favorite ETFs for this purpose are from ProShares, specifically IGHG, which hedges rate risk but still offers the yield income.

Published in Bonds: IG
Friday, 12 March 2021 16:10

Big U-Turn Looms in the Muni Market

(New York)

Even before the pandemic and subsequent crisis, the high-yield Muni market failed to deliver the returns after taxes that the corporate bond market…view the full story on our partner Magnifi’s site

Published in Bonds: Munis
Friday, 12 March 2021 16:09

It's a Good Time to Pivot into Bonds

(New York)

Bond market investing hasn’t seemed so attractive recently as rates on even long-term government debt such as the 10-year Treasury hit lows…view the full story on our partner Magnifi’s site

Published in Bonds: IG
Tuesday, 09 March 2021 17:24

How to Protect Against Surging Yields

(New York)

If investors’ eyes are watering from the big jump in yields over the last month, no one could blame them. The steep rise has sideswiped markets and until today, sent the Nasdaq into a full blown correction, with the rest of the market down strongly too. So how can investors protect their portfolios from losses because of yield jumps? One asset class to consider are rate hedged ETFs, such as the ProShares Investment Grade-Interest Rate Hedged ETF (Cboe: IGHG) and ProShares High Yield Interest Rate Hedged ETF (Cboe: HYHG). Both funds go long corporate bonds and short Treasuries, which allows them to remove rate risk, but still keep the benefit of income streams from the underlying corporate bonds.


FINSUM: Rates usually rise when the economy is improving, as is happening now. In these periods, corporate bond spreads usually tighten. So this type of ETF allows you the benefit from the increasing attractiveness of corporate bonds while also protecting against interest rate risk.

Published in Bonds: High Yield
Friday, 05 March 2021 15:46

Why Gold is Positioned for a Bull Run

(New York)

The price of gold has been in a slump after it reached all-time highs mid pandemic. A variety of micro and macro factors are melding to put this commodity in a major second rally ...View the full story on our partner Magnifi’s site

Published in Comm: Precious
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