Markets
U.S. Treasury yields rose on Monday with the benchmark 10-year yield hitting a five-week peak of 3.039%, while the 30-year yield climbed to a seven-week high of 3.268%. Yields rose as investors await a Federal Reserve gathering occurring later this week in Jackson Hole, Wyoming. The Fed is widely expected to reinforce its commitment to tackling inflation. Fed Chair Jerome Powell is scheduled to speak Friday morning at the Jackson Hole symposium. Last week's Fed minutes appeared to suggest that the Fed is on course to continue to increase interest rates with the central bank seeing "little evidence" that inflation was easing. The auction for shorter-dated coupons this week also added to the sell-off in Treasuries, pushing their yields higher. Traders typically sell Treasuries before an auction and then buy them back at a lower price.
Finsum: Treasuries hit multi-week highs on Monday as investors await Fed Chair Jerome Powell’s speech on Friday morning at the Jackson Hole symposium.
BlackRock launched a new series of fixed-income ETFs which allow access to buy-write investments on bond securities. iShares 20+ Year Treasury Bond BuyWrite Strategy (TLTW), Shares High Yield Corporate Bond BuyWrite Strategy ETF (HYGW), and the iShares Investment Grade Corporate Bond BuyWrite Strategy ETF (Cboe: LQDW) are all different variations of the new options available to investors. BR says buy-write strategies have been available to equity ETFs for a long time, but have not infiltrated fixed income. These options will give more exposure to yield in what has been one of the most difficult times for fixed-income investment in decades. This just adds to BR’s legacy of innovation and creativity in bond market ETFs.
Finsum: This is an interesting idea, and maybe if inflation is cooling quicker than expected bonds are too cheap.
Fixed Income ETF: Bonds, Total Market, ETF, Treasuries
Volatility can be a maddening beast. Sure, you can hope all well be relatively calm on the western front this month, and The Federal Reserve, the European Central Bank and the Bank of Japan won’t break bread until next month, pointed out marctomarket.com.
Meantime, the volatility of the S&P, the VIX, hovers at three month lows while the equivalent in the Treasury market’s off drastically from an early July peak.
A cocktail of burgeoning prices and moderating economies are giving investors a run for their money, the site continued.
Some economists insist the U.S. is sitting in a recession, hearty U.S. growth in jobs and with an unemployment rate at 3.6%, cyclical lows, aside. The market, in all its adamance, figures that prior to year’s end, the target of the Fed funds – currently 2.50% -- will bounce an additional 100 bp.
Inflation and the Fed’s policy are hanging is as some of the primary drivers of market and investor sentiment Advisors and investors upon which should train their focus in the year’s second half, Wisdom Tree believes, according to finance.yahoo.com, in an article was published originally on ETFTrends.com.
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Fixed income investors might feel lost in the current environment, but with yields starting to generate real income and prices ultra-low it might be the perfect buying opportunity. A new series of bond ETFs centered around treasuries was launched to capitalize on this unique time in the bond market. Slope Capital LLC and Genoa Asset Management LLC launched 10-year (UTEN.O), two-year (UTWO.O), and three-month (TBIL.O) dropped ETFs that will hold the most recent current Treasuries in the respective categories. Managers of the funds say this is well crafted precise tool for the fixed income investors that need a product like this. It gives new potential to bond investors in a precise way to tailor portfolios. There has been a flood into fixed income products as of late and funds are launching rapidly in response and will continue over the next half-decade.
Finsum: These tools can be utilized for investors wanting bond exposure, but not wanting to deal with the task of trading in the treasuries market and constantly updating
As the economy’s taken a wicked turn toward the dark side, the clamor for fixed income ETFs has parachuted, according to usnews.com.
Peng Cheng, JP Morgan strategist, explained that this includes retail investors, who hopped on the bandwagon last month, loading into credit ETFs like SPDR Bloomberg High Yield Bond ETF and the share iBoxx $ Inv Grade Corporate Bond ETF.
Earlier in the month, a new series of exchanged-traded funds launched, the US Benchmark Series. That will help ease they way for individual and institutional investors to trade the must updated individual benchmark U.S. Treasuries, which will shone a light on the maturing ETFs in the fixed income category, according to reuters.com. "This gives (investors) a tool to say, we really want to focus on how we execute our investment strategy, as opposed to how effectively we trade Treasury bonds," said F/m President Alex Morris.
A $4 billion investment advisor based in Washington, D.C. recently announced the launch of a new suite of US Treasury ETFs that will make it easier for investors to access the US Treasury market. F/m Investments' new US Benchmark Series will allow investors to own each “Benchmark” US Treasury in a single-security ETF. Each fund will hold the most current US Treasury security that corresponds to its stated tenor. The initial three ETFs are the US Treasury 10 Year ETF (UTEN), the US Treasury 2 Year ETF (UTWO), and the US Treasury 3 Month Bill ETF (TBIL). While Treasuries are very liquid securities, they can be hard to trade. This is especially true for investors who must roll them over frequently to maintain maturity. The new ETFs will hold each maturity's most current Treasuries.
Finsum: A new suite of single bond ETFs will provide investors access to a maturity’s most current treasury.