FYI: As interest rates rise, investors have scrambled to protect their portfolios. That's the best explanation I can come up with for why assets in the $1.23 billion iShares 0-5 Year Investment Grade Corporate Bond ETF (SLQD) rose a whopping 35% this week, the largest increase any ETF with more than $200 million in assets under management saw in that time period.
Regards,
Ted
http://www.etf.com/sections/features-and-news/etf-week-short-bonds-soar-slqd
Comments
---Don't know who the "investors" are, eh? Are they pension funds, individuals or perhaps individual's money moved by advisors and/or some of all?
Let us think about this, yes? The Fed. has been pushing the short end of yields up, correct? So, rates up and prices down. Yes, the longer duration is generally more negatively impacted, but the short end pricing suffers, too; at least for some time frame.
So, how does one expect some form of monetary protection in any of the investment grade bond areas based upon the overview of the article?
---Simple answer is "not".
Whomever these investors may be, they would be better suited in interest bearing accounts until some of the dust settles in the world of yields.
I don't get it. If someone is able to offer what the "plan" may be to invest in short term duration bond funds over the past 6 months to 1 year; please enlighten us.
Have a pleasant remainder, eh?
Catch