The demand for US investment-grade corporate bonds was driven by higher yields generated by bonds in the midst of low interest rates.
IGEM gives you good exposure to investment-grade emerging market bonds. They’re less risky and add diversification benefits to your portfolio.
According to Bloomberg, Treasury Inflation-Protected Securities (or TIPS) have generated a year-to-date return of 6.3% compared to 4.7% by the broad Treasury market.
Since July 2016, VPU has experienced net outflows of nearly $320 million.
In VPU, the top ten holdings form nearly 50% of the total portfolio. These holdings include NextEra Energy (NEE), Duke Energy (DUK), and Southern Company (SO).
In late July, the Utilities Select Sector SPDR ETF (XLU) experienced an outflow of more than $1 billion.
Although the markets have surged to record highs in the last two months, there are early warning signs you should watch. The recent decline came on Friday, September 9.
Volatility (VXX) (XIV) typically moves higher in the latter part of the year, especially in September and October, and gradually recedes after that.
There are reasons to be hopeful that the recently improved tone in the economic data could persist over the second half of 2016.
The relationship between the CBOE Volatility Index (or VIX) and the spread between high-yield bonds over ten-year Treasuries is highly correlated.
The CBOE Volatility Index (or VIX), a measure of market turbulence, tumbled 12% during the week ended September 3, 2016. It was the biggest fall in two months.
The correlation between oil and high-yield bond indexes is very high. Where oil goes, high-yield bonds follow.
The three-month Volatility Index (or VIX), which measures the implied volatility of options on the S&P 500 stock market index, is approaching record lows.
The surge of inflows into junk bonds indicates that the fear of recession in the US economy has faded, which has boosted investor confidence.
Led by improvements in production-related indicators, the Chicago Fed National Activity Index (or CFNAI) rose to +0.27 in July from +0.05 in June.
Yields on high-yield debt (HYG) (JNK) and spreads between high-yield debt and Treasuries both fell over the last year.
The global hunt for returns has turned US junk bonds into an attractive investment option.
Inflows into emerging market equity ETFs keep on dominating the inflow picture within our country ETF universe.
US GICS Sector ETFs witnessed aggregate net inflows of ~$800 million last week
Analyzing last week’s most significant ETF inflows in the context of our entire ETF universe, we note that investors continued to move capital into emerging markets.