Vanguard Total Bond Market ETF
Latest Vanguard Total Bond Market ETF News and Updates
Why investors are preferring high-quality debt
High-quality bonds can be an investor refuge when there’s market volatility. These securities provide relatively stable cash flows. The default probability is low.
Investors Should Avoid Defensive Sectors If Rates Rise
Valuations are at the higher end of their historical range. Investors should avoid defensive sectors, which are highly sensitive to interest rate changes.
Must-know update: Redbook Index same-store sales data released
The Redbook Index released the same-store weekly data on Tuesday, March 11, 2014.
Must-know update: Are retail sales poised for a spring surge?
For the week ended March 15, retail same-store sales grew 0.7% and 1.5% week-on-week and year-on-year, respectively.
Ray Dalio Says Interest Rate Hikes Could Lead to Bear Market
Dalio is worried about the long-term economic outlook, and he believes that the strengthening macroeconomic data, specifically wage growth and inflation, could encourage the Fed to continue its aggressive monetary policy.
Why Did the US Federal Reserve Turn Hawkish at Its June Meeting?
As expected, the Federal Reserve increased the interest rate by 25 basis points after its June meeting, which concluded on June 13.
Must-know: How will this week’s JOLTS report impact US debt?
JOLTS (the “Job Openings and Labor Turnover” report) produces monthly estimates of job openings, hires, quits, layoffs and discharges, and other separations.
What New Developments Can You Expect from the Fed?
Potential new developments from the Fed include a suggestion by the subcommittee on communications that median values of policymakers’ projections be published.
Important releases hone in on rates and consumer spending
The hottest topic for market players right now is the interest rate hike. Last week’s labor releases spurred the recovery. Many investors had thought the recovery was flagging.
Pianalto’s take on the Fed funds rate before the financial crisis
When consumers can borrow at lower interest rates, they can afford to buy more goods and services, and the businesses that supply those goods and services can hire more people.
How will this week’s consumption indicators impact debt securities?
This week, markets will be looking at any clues revealing hints for the outcome of the Fed’s next Federal Open Market Committee Meeting (or FOMC) slated for March 18–19.
Low Interest Rates Have Kept Bond Yields Low
Weakness in the labor market means low interest rates. The US economy is gaining momentum with stellar growth rates in the last two quarters. It grew by 4.6% in 2Q14.
Your Update on the FOMC July Meeting
In its July meeting, the Federal Open Market Committee decided to maintain its target range for the federal funds rate at 1%–1.25%, in line with the market’s expectations.
Europe and China ready to jump-start their economies
Unconventional stimulus measures from central banks usually end up injecting liquidity in global financial markets. They’re especially relevant to emerging market economies.
Why Kocherlakota wants the Fed to be free in its decision making
Kocherlakota gave a presentation at the annual American Economic Association conference. He was firmly in favor of letting the Fed be free in its decision making.
A Weaker Euro Could Lead to Inflation in Europe
A weaker euro could lead to inflation in Europe. The depreciation in the euro was initially due to the appreciation in the dollar.
Investors keep providing liquidity to investment-grade bonds
While issuers’ activity waned last week, many investors continued to pore over the new issues that hit the corporate bond market (LQD).
Are the Markets Too Optimistic?
Market participants were caught by surprise when they read that the Federal Open Market Committee’s members were concerned about slowing growth in the US economy during 1Q17.
Clearing up a common misconception about bond ETF management
A bond ETF is managed by a human (sometimes several). A common misconception about bond ETFs is that they simply hold all the securities in the index they track.
Must-know: Why volatility is likely to tick up in September 2014
While volatility fell over the course of August, the VIX’s daily average for last month was approximately 15% higher than its average over the previous three months.
Why corporate bonds reacted to the QE3 exit and GDP surprise
Bond yields and prices move in opposite directions. Due to the increase in yields last week, returns on investment-grade bonds were negative.
Miller: Bond Bear Market to ‘Propel Stocks Significantly Higher’
Legendary value investor Bill Miller has an optimistic view on the equity market.
Gundlach on Higher Yield: Watching the Copper-to-Gold Ratio
Billionaire investor and bond guru Jeffrey Gundlach also shared his view on bond yields in an interview with CNBC.
Is the Fed Sure What It’s Doing?
In this series, we’ll analyze Fed members’ comments in June 2017 to better understand their outlooks on the US economy and how they justify their hawkish or dovish stances.
Markets Look at US-China Trade Talks as Slowdown Concerns Multiply
Today, another round of trade talks started in Beijing.
Macro investment recovers: Time to short the long end of the curve?
This article considers the possibility of rising rates and the case for taking a bearish view on bond prices.
Sell-Off in US Stocks as US Treasury Yields Soar
On October 3, US bond yields (BND) soared due to a bond sell-off. The sell-off continued on October 4, though at a slower pace.
Must-know: Future impacts of financial stability measures
The Fed currently uses considerable staff resources in monitoring financial markets for risks arising from financial instability.
What Should You Expect from Monetary Policy Announcements?
Most FOMC participants indicated that they preferred to consider a possible rate hike on a meeting-by-meeting basis—without providing any hints about the timing of a rate hike.
Unique opportunities for investors given new monetary policy outlook
I’ve discussed on The Blog how an investor can think of the federal funds rate and QE as a gas pedal. Sometimes it’s good to ease off a bit to limit the pace of acceleration.
The must-know outlook for equities and bonds in 2014
The Fed, in its latest announcement, has further reduced its bond buying program to $55 billion a month, signalling that the improvement in the economy is on track.
How Green Bonds Can Help Diversify Investor Base
Even if we assume that green bonds don’t offer any significant premium over conventional bonds, there are many who believe in other noteworthy advantages of green investing.
Tapering and debt markets: Predicting the Fed’s upcoming view
Possibly the most important indicator for the debt markets going forward will be provided by Fed Chairman Janet Yellen’s semi-annual monetary policy testimony.
Why policymakers favor reducing MBS and Treasuries reinvestment
The Fed also embarked on three rounds of quantitative easing (or QE). Now, the Fed is looking to decrease the size of its bloated balance sheet.
Why the FOMC believes that credit conditions are still strong
Easier borrowing conditions stimulate business investment among firms. Higher investment would generate employment and benefit firms’ revenues and profits.
Why these 5 states saw the highest home price appreciation
Home prices rebounded 0.8% in December after easing 0.1% the month before. Excluding some monthly volatility, home prices have been in an uptrend.
Why you should know the key differences between job reports
Few economic releases elicit as much reaction from both the stock (IVV) and bond (BND) markets as the employment reports issued by Automatic Data Processing (ADP) and the Bureau of Labor Statistics (the BLS).
Must-know: What investment-grade corporate bonds expect in 2015
U.S. investment-grade corporate bonds (LQD) weathered higher market volatility well in 2014. They’ve been a steady source of returns for investors.
Letting Alternative Investments Hedge Your Returns against Deflation
An alternative investment is an investment in asset classes other than stocks, bonds, and cash that seeks to provide a hedge against various market risks.
Has Britain Really Voted Its Way to Prosperity?
The Brexit referendum aftermath has translated to gains for certain hedge funds, while washing away earlier gains for others.
US Steel Industry’s Woes Are Far from Over
Most steel stocks continue to trade near 52-week lows. U.S. Steel Corporation (X) has fallen more than 70% year-to-date.
Alternative ETFs’ Investment Strategy Guide
A liquid alternative ETF, the ProShares Large Cap Core Plus ETF (CSM) tracks a long-short index of Credit Suisse 130/30.
Must-know: Key questions to ask when selecting an ETF
iShares now offers 20 low-cost Core ETFs that are a great starting point to consider as core holdings for your portfolio.
Investment-Grade Bond Funds Saw Inflows Last Week
Flows into investment-grade bond funds were positive last week. Investment-grade bond funds saw net inflows of $907.1 million during the week ending July 6.
Why investment-grade bond issuance last week beat expectations
Investors willing to take a little higher risk than what they find in Treasuries, if they’re in search of higher returns, can consider investing in investment-grade corporate bonds.
Dalio’s Bridgewater Associates Increased Its Holdings in EWZ
Ray Dalio increased his firm’s holdings in the iShares MSCI Brazil Capped ETF (EWZ) in 2Q16.
Investment-Grade Bond Funds Saw Outflows Last Week
Flows into investment-grade bond funds (LQD) were negative in the week ending June 17. This was the second consecutive week witnessing outflows.
Bear strategy: Profit from rising rates with fixed income ETFs
Investors could consider hedging their short-term duration risk (HYG: 3.98 years, JNK: 4.20 years) with a short position in longer-dated bonds.
Why Gundlach Believes the Bond Market Is Set Up for a Rally
Prominent bond investor Jeffrey Gundlach discussed the bond market’s performance and his expectations for the bond market in a recent interview.
Can Corporate Profitability Alone Sustain US Stock Market Rally?
The S&P 500 Index (SPY) is up more than 60% over the last five years, providing good evidence of the US stock market rally. More than $7.8 trillion worth of funds is benchmarked to the index.
Financial intermediation, systemic risks, and “too big to fail”
When financial intermediaries allocate funds, they assess the risks and returns that come from various risky claims. Intermediaries help allocate resources and risks throughout the economy. Financial intermediation can result in concentrated risks. The risks increase the financial system’s fragile state. These risks are called systemic risks.
Municipal bonds in 2014: General obligation bonds down but not out
Total municipal bond issuance in the first quarter of 2014, was $62.6 billion, down ~26% from the $84.3 billion issued in the first quarter of 2013.
Why did investors give US debt markets the thumbs down?
Volatility, or the index commonly known as the “fear factor,” surged over 34% to 17.03 in the week ending August 1—this was the highest level in almost four months.
Why Kocherlakota concludes that the FOMC is underperforming
Even among those who have jobs, the fraction of people working part-time but who would like to work more hours is higher than the historical average.
Must-read: Use emerging market bonds for higher yield potential
For those who want a little more adventure on their menu, there’s always the option of adding some unique flavors like spicy kebabs. This is the equivalent of adding some emerging markets fixed income to your bond portfolio.
Ultra Easy Monetary Policy: Major Catalyst for the Bull Market
Monetary policy has been one of the main catalysts of this bull market. These returns were mainly aided by the ultra easy monetary policy.
Must-know: Charles Evans discusses monetary policy in Istanbul
The Fed’s main policy tool, the funds rate, has been at near zero levels since December, 2008.
AAA and AA credit versus the below-investment-grade Sprint
This article considers the trade-offs between high-quality, low-yielding fixed income opportunities and lower-quality higher yields in the current improving economic environment.
David Tepper Discussed the Equity and Bond Market
Tepper thinks that the bond market’s (BND) performance is a good indicator to analyze the equity market’s (QQQ) performance.
Labor conditions: AAA credit versus the sub-investment-grade Sprint
This article takes a closer look at the changes in the discouraged worker data and considers the implications for fixed income investors.
Must know: Why junk bond funds are in vogue again
Secondary market activity in high yield debt mutual funds High yield debt (HYG) mutual funds recorded their second consecutive weekly inflow. Net flows into junk bond (JNK) funds came in at ~$1.6 billion in the week ending October 31. Net flows into high yield bond (PHB) mutual funds are down by ~$2.3 billion so far […]
Assessing the long-term structural issues plaguing the US
The improving economy still faces long-term structural issues like slow wage growth, below-trend consumption and a shrinking labor force participation rate.
Bill Gross Says the Fed Must ‘Get off Zero’
Bill Gross expressed his views on the markets and on the Fed’s decision to delay the rate hike in his Investment Outlook October 2015.
Why high yield bonds offer an investment opportunity
High yield bonds have come under pressure lately, and as a result, are now looking relatively attractive. Spreads recently widened out to the highest level in a year.
Investment Avenues during the Rise of Short-Term Interest Rates
Bill Gross thinks the central banks should implement their strategies very carefully and cautiously in this scenario.
Key differences between PCE and CPI as inflation measures
The CPI and PCE are both important indicators of U.S. inflation. CPI is more important from an individual perspective, while PCE is more important for monetary policy.
Walgreens Boots Alliance Issued the Most High-Grade Bonds
Walgreens Boots Alliance (WBA) issued Baa2/BBB rated high-grade bonds worth $6.0 billion through five parts on May 26.
How can retail investors invest in floating rate notes, or FRNs?
The Treasury’s newest issuance of floating rate notes, or FRNs, on January 29, commanded immense investor interest. The $15 billion issue received bids for 5.67 times the issue amount.
High-quality fixed income versus BBB+ and BB: Verizon & Sprint
While the short duration aspect of both JNK and HYG might seem attractive to investors wary of rising rates, investors should bear in mind that both HYG and JNK also have significant credit risk.
Why Gross Thinks Global Investors Will Rush toward US Treasuries
As the Fed moves toward a gradual, continued rate hike process, it’s important for investors to keep an eye on the other central banks.
Why Bill Gross’ exit from PIMCO affected mutual fund flows
In the coming months, yields are likely to trend higher as the Fed moves closer to ending the taper and tightening monetary policy.
5-year Treasury notes saw lower auction demand
The difference between five-year and 30-year Treasury (TLT) yields narrowed to 142 basis points (or bps) on September 26. This is the narrowest it has been since January 16, 2009.
Must-know: Is the utilities sector a bond market proxy?
It’s important to note that higher real yields, not rising inflation, are driving today’s higher nominal yields as investors are demanding more compensation for holding bonds
Who will replace Bernanke as the next Fed Chairman? (Part 3)
Continued from Part 2 Because Bernanke will step down, there’s great speculation on who will replace him So who is it likely to be the next Bernanke? The case for Summers Between the two, Summers certainly has more excitement building around him than Yellen. Summers also has Wall Street credibility—at least more so than Yellen. […]
Is Brexit Underscoring the US Corporate Bond Market’s Strength?
When uncertainty rises, equity markets become volatile, and bond spreads rise. Brexit is likely to have a similar effect on capital markets.
The Fed ends its asset purchase program at the October FOMC meeting
In December 2008, when the U.S. economy entered its dreadful recessionary phase, the Federal Reserve (or Fed) reduced the federal funds rate to nearly zero in order to stimulate household and business spending and support economic recovery.
Why unemployment data moves bond yields
Private and government construction both reported declines. The construction value chain has a multiplier effect on other sectors of the economy, and can significantly impact both stock and bond markets.
How You Can Win More By Losing Less
Most investors focus much of their time on picking assets that have the potential to win. However, limiting downside risk is just as important.
Basics About The Capital Gains Tax
The rates for capital gains tax depend on the asset’s holding period. If the holding period is less than one year, short-term capital gains tax is payable.
What Are the Attractive Characteristics of High Yield EM Bonds?
Investors are flocking to government bonds (BND) of developed markets, which is causing downward pressure on interest rates.
Recommendation: Look to select areas of emerging market debt
Select areas of the EM debt sector hold good potential, as many of these countries exhibit low leverage levels and are currently funded through year-end.
Why US inflation data is important and how we measure it
U.S. inflation is not just a measure of growth and price pressure in the U.S. economy. It has more far-reaching consequences.
Is the simple life cycle model practical in the current scenario?
Being a large capitalist economy with relatively smoothly functioning markets, some degree of inequality is expected.
Why the issuance for high-yield bonds was dropped
After rising sharply the previous week, the issuance for the high-yield bonds dropped to $8.6 billion for the week ending on May 16 compared to $10 billion for the week ending on May 9.
Why economic indicators point to broad-based growth
Last week, U.S. economic data covered a number of sectors, including housing, employment, manufacturing, and inflation. All three housing indicators released last week were positive, and initial jobless claims once again beat market expectations. The CPI for September came in at an annualized rate of ~1.7%, the fourth straight monthly decline.
A Tale of 4 Central Banks
In this series, we’ll analyze how different asset classes like bonds (BND) and global equities (VTI) reacted to last week’s central bank events.
Must-know: The Treasury International Capital report
Net foreign purchases of long-term securities came in at $19.4 billion.
Why the Recent REIT Rebound Could Stretch a Little Further
The real estate sector (VNQ) has been lagging in performance in 2018. It’s seen a year-to-date loss of 6%.
Must-know: Why did firms report a sharp spike in wages in May?
Manufacturing growth appears to be steady in the Fifth District. Although new orders declined sharply month-on-month, firms remained upbeat for business prospects.
Janet Yellen on the State of the US Economy and the Outlook
After stating her expectation of a rate hike, Yellen noted that robust household spending was helping US economic activity expand.
Where Green Bonds Could Fit into Your Portfolio
As we’ve seen, green bonds add value to the environment. But they can also provide you with diversification benefits.
What Drove Retail Sales Higher in April?
The April retail sales report indicated that the gains were broad-based with nine of the 13 major categories moving higher during the month.
What Could Keep Treasury Yields Low?
Low yields abroad could keep Treasury yields low. The ten-year US Treasury is currently yielding ~2.4%—compared to 0.9% of the German bund.
Why investors see strong fundamentals in investment-grade bonds
Treasury yields and U.S. investment-grade bond yields usually move in the same direction. Last week, corporate investment-grade bond yields followed cues from the U.S. Treasuries market. Treasury yields (TLT) had fallen over the week on higher demand for safe-haven securities. They also fell as a result of the European Central Bank’s (or ECB) dovish monetary policy stance.
The looming US retirement crisis: Key takeaways for investors
The good news is that while the recovery has impressed few, it has been much better than the alternative we were all facing six years ago, and there is still time to avoid, or at least mitigate, the pending retirement crisis.
Must-know: How the Fed may deal with its bloated balance sheet
The Fed’s balance sheet size has bloated to $4.3 trillion as on May 14, 2014, compared to pre-crisis level of $870 billion seen on August 1, 2007.
What Dalio Thinks about Equity Market Rally and Bond Market Sell-Off
Expectations for a stronger economic environment, business-friendly policies, less regulation for businesses, and policy reformation are driving the equity market (SPY) (QQQ).
April FOMC: Are you ready for clues of the Fed’s new guidance?
This week, the Fed’s third Federal Open Market Committee (or FOMC) meeting of the year will be held on April 29–30—always a market-moving event.
High-grade bond supply spike triggers hope for record year
Last week was strong in terms of issuance volumes in the primary capital markets. High-quality bond issuance touched $51.3 billion across 42 issues in the week ending November 7.
Jeffrey Gundlach: How to Survive the Market Zigzags in 2019
Jeffrey Gundlach expects 2019 to continue to be a volatile year. The last quarter of 2018 was quite volatile after a prolonged calm in the markets.