iShares Core U.S. Aggregate Bond ETF (ARCA: AGG)

에 대한 최신 뉴스 iShares Core U.S. Aggregate Bond ETF (ARCA:AGG)

iShares Core U.S. Aggregate Bond ETF

The Fund seeks to track the investment results of the Bloomberg U.S. Aggregate Bond Index (the Underlying Index), which measures the performance of the total U.S. investment-grade (as determined by Bloomberg Index Services Limited (the Index Provider or Bloomberg)) bond market. As of February 29, 2024, there were 13,534 issues in the Underlying Index.

Blackrock Cash Funds: Institutional, Sl Agency Shares

iShares Core US Aggregate Bond ETF

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Broad U.S. Equity ETFs

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ETFs

폭발적인 ETF들의 성장이 금융 환경을 재편하고 있으며, 운용 자산이 현재 15조 달러의 이정표에 가까워지고 있다. 최근 분석에서 JP모건의 전략가 니콜라오스 파니기르초글로(Nikolaos Panigirtzoglou)는 이러한 엄청난 변화의 의미를 자세히 조사하면서 ETF가 투자자 행동, 유동성 패턴 및 심지어 시장 위험까지도 어떻게 재정의하고 있는지를 조명했다.

ETF들이 15조 달러에 가까워지며 미국 시장을 재편하는 10가지 방법

treasury bond shutter

Government

Bonds

Politics

BNDX

GOVT

SPAB

iShares Trust Barclays 20+ Year Treasury Bond Fund

VCIT

VCSH

안정성을 위해 채권 및 채권 ETF를 찾는 투자자들은 도널드 트럼프 대통령 당선인의 관세 접근 방식으로 인해 수익률 상승 압박을 가할 수 있으므로 변동성이 높아질 수 있다.

연준의 금리 인하와 트럼프의 재정 정책이 충돌하면서 채권 ETF가 하락

Wall Street

Equities

Specialty ETFs

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8월 초의 변동성에 굴하지 않고 투자자들은 8월에 미국 상장지수펀드(ETF)에 750억 달러라는 엄청난 금액을 쏟아부었다. 이는 작년 같은 기간에 비해 5배 증가한 수치이다.

8월에 미국 ETF가 $750억 유치하여, 2024년 전체 유입 금액이 $6,000억 돌파: 상위 ETF 리스트

Toubani Resources Inc

Antilia Group Corp

Simplify Aggregate Bond ETF

AGRIOS GLOBAL HLDGS LTD by Agrios Global Holdings Ltd.

Agrios Global Holdings Ltd

Allied Energy Inc

AEGEAN AIRLS SA UNSP/ADR by Aegean Airls SA

Aegean Airlines SA

Harbor ETF Trust Harbor Disciplined Bond ETF

WisdomTree Yield Enhanced U.S. Aggregate Bond Fund

AG GROWTH INTL INC by AG Growth International Inc.

Ag Growth International Inc

Stock and ETF investors, take note. <a href="https://www.benzinga.com/topic/peter-schiff">Peter Schiff </a>sees trouble ahead and he's not mincing words. The renowned investor warns that the government and financial media are &#8220;making the same mistake again&#8221; as they did before the 2008 Global Financial Crisis, Schiff wrote <a href="https://x.com/PeterSchiff/status/1906690596640600283">on</a> X.
The culprit this time? A toxic mix of tariffs, rising interest rates and misguided Federal Reserve policies that could unleash an economic firestorm.
<h2 class="wp-block-heading">Tariffs: A Recipe For Inflation, Rate Hikes</h2>
Schiff argues that tariffs won't just impact trade &#8211; they'll send shockwaves through the economy. &#8220;Tariffs mean fewer goods will come into the country, and fewer dollars will go out. More money chasing fewer goods means higher domestic prices. This is an economic certainty,&#8221; he said.
For investors, that translates to higher inflation, a weaker consumer and pressure on corporate margins.
But it doesn't stop there. &#8220;Lower trade deficits will result in fewer dollars being recycled into U.S. bonds, sending long-term interest rates higher.&#8221; With higher rates, borrowing costs rise for businesses and consumers alike, slowing growth and putting pressure on stocks—especially high-flying tech names.
Read Also: <a href="https://www.benzinga.com/economics/macro-economic-events/25/03/44309742/recession-watch-small-caps-sound-the-alarm-but-credit-markets-shrug">Recession Watch: Small Caps Sound The Alarm, But Credit Markets Shrug</a>
<h2 class="wp-block-heading">Fed To The Rescue? Not So Fast</h2>
Schiff sees the Federal Reserve making the wrong move when the economy starts showing signs of strain. &#8220;The Fed will respond to this &#8216;unexpected&#8217; economic weakness with rate cuts, ignoring the surge in consumer prices as a transitory effect of tariffs.&#8221; 
Translation? Inflation won't just persist &#8211; it could spiral. And if the Fed resorts to quantitative easing (QE) again, Schiff warns, &#8220;throwing gasoline on an already burning inflation fire&#8221; could create a crisis far worse than 1970s-style stagflation.
<h2 class="wp-block-heading">What It Means For Investors</h2>
If Schiff's prediction plays out, stock investors should brace for turbulence. High-growth and rate-sensitive sectors like technology, as tracked by the Invesco QQQ Trust (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>) and the Technology Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLK#NYSE">XLK</a>), could face pressure. On the other hand, inflation-resistant assets &#8211; such as:
Commodities, as tracked by the Invesco DB Commodity Index Tracking Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DBC#NYSE">DBC</a>); Gold, as tracked by the SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>), and select energy stocks &#8211; may become safe havens.
Bond investors and those invested in popular Treasury tracking ETFs such as iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>), the Vanguard Total Bond Market ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BND#NASDAQ">BND</a>) and the iShares Core U.S. Aggregate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AGG#NYSE">AGG</a>) beware: rising long-term rates could send Treasury prices tumbling.
Meanwhile, a &#8220;weaker dollar and larger budget deficits&#8221; could mean international ETFs and hard assets outperform U.S. equities.
<h2 class="wp-block-heading">Is This The Next 2008?</h2>
Schiff isn't predicting a simple market correction &#8211; he's warning of something much worse. &#8220;This will not be 1970s-style stagflation. It will be something much worse.&#8221; 
If history is about to repeat itself, as he suggests, investors who ignore the warning signs could be caught in the fire. The question is: Are you ready?
Read Next: 
<ul>
<li><a href="https://www.benzinga.com/economics/macro-economic-events/25/03/44456554/trade-wars-fed-moves-and-a-40-recession-risk-is-your-portfolio-ready">Trade Wars, Fed Moves And A 40% Recession Risk &#8211; Is Your Portfolio Ready?</a></li>
</ul>
Photo: Shutterstock

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Macro Economic Events

Economics

Markets

Trading Ideas

PowerShares DBmmodity Index Optimum Yield Diversified Fund

Peter Schiff Sounds The Alarm: 'Same Mistake Again' Could Trigger Economic Firestorm

The explosive <a href="https://www.benzinga.com/etfs">growth of ETFs</a> is reshaping the financial landscape, with assets under management now nearing the $15 trillion mark. 
In a recent analysis, JPMorgan strategist Nikolaos Panigirtzoglou delves into the implications of this seismic shift, spotlighting how ETFs are redefining investor behavior, liquidity patterns, and even market risks. Here are his top 10 takeaways that every investor should know.
1. Retail Sentiment Is Driving Volatility Panigirtzoglou notes that the growing dominance of ETFs has made retail investors more influential in driving market sentiment. Unlike institutional investors, retail traders tend to have shorter time horizons, leading to sudden, amplified shifts in market trends when sentiment swings.
2. Longer Rallies, Sharper Corrections The analyst highlights how ETFs encourage momentum-driven markets, fueling prolonged rallies during bullish periods. However, during market reversals, the absence of active management safeguards can result in sharper corrections and increased volatility.
Read Also: <a href="https://www.benzinga.com/24/11/42097545/feds-bowman-warns-on-inflation-risks-signals-neutral-rate-may-be-closer">Fed&#8217;s Bowman Warns On Inflation, Says Neutral Interest Rates May Be Closer &#8216;Than We Currently Think&#8217;</a>
3. Big Money Flows Into Large-Caps Most ETFs are market-cap-weighted, which means they funnel disproportionate capital into large-cap stocks. Panigirtzoglou warns this trend could inflate valuations for mega-caps while crowding out smaller companies, risking capital misallocation.
Companies such as Nvidia Corp, Apple Inc, and Microsoft Corp each currently command over $3 trillion in market cap on the U.S. stock markets.
4. Liquidity Rushes to the Closing Bell As ETFs rebalance towards the end of trading sessions, liquidity has increasingly clustered during these periods. Around one-third of S&amp;P 500 trades now occur in the final 10 minutes of the day, Panigirtzoglou points out, creating a feedback loop of concentrated activity.
5. Concentrated Risks in a Few ETFs The rise of giant ETFs like the SPDR S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) and the Invesco QQQ Trust, Series 1 ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>) has introduced systemic risks. Panigirtzoglou argues that their scale and importance rival those of equity futures, making the market vulnerable to large, single-product flows.
6. Algorithmic Traders Are Thriving Bond ETFs, in particular, have bolstered electronic and algorithmic trading, says Panigirtzoglou. Non-bank market makers now dominate liquidity provision in fixed-income markets, capitalizing on high-volume, low-margin trades.
Popular bond ETFs, such as the iShares Core U.S. Aggregate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AGG#NYSE">AGG</a>) and the Vanguard Total Bond Market ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BND#NYSE">BND</a>), are among the largest and most liquid bond market ETFs traded in the U.S.
7. Index Changes Have Outsized Effects Panigirtzoglou emphasizes how ETF-driven flows have magnified the impact of index rebalancing. Stocks entering major indices see outsized gains, while those removed face steeper declines than fundamentals might justify.
8. Corporate Governance Takes a Hit With passive funds dominating, Panigirtzoglou sees a decline in corporate activism. Unlike active managers, passive funds have little incentive to push for governance changes, which could diminish oversight.
9. Market Efficiency Is Declining The shift toward passive investing reduces opportunities for arbitrage, Panigirtzoglou argues, leading to more persistent mispricings. While this could lure active managers back, their ability to extract alpha has waned.
10. Passive Investing's Limit May Be Near Panigirtzoglou suggests there may be a natural ceiling for passive investing. If market inefficiencies grow too large, active managers could stage a comeback, attracting capital back from ETFs to actively managed funds.
The ETF revolution has undoubtedly democratized investing, but Panigirtzoglou warns that its rapid rise comes with unintended consequences. 
From concentrated liquidity to increased systemic risks, the landscape is evolving in ways that demand vigilance. 
As ETFs near the $15 trillion milestone, will passive dominance plateau, or is its impact just beginning?
Read Next: 
<ul>
<li><a href="https://www.benzinga.com/24/11/42107863/us-futures-head-lower-as-nvidia-reports-slowdown-in-quarterly-revenue-growth-expert-says-market-weakness-is-perfectly-normal-but-late-november-is-still-possible">US Futures Head Lower As Nvidia Earnings Fail To Impress Investors: Expert Says Market Weakness Is &#8216;Perfectly Normal,&#8217; But Late November Rally Is Still Possible</a></li>
</ul>
Image created using artificial intelligence via Midjourney.

10 Ways ETFs Are Reshaping US Markets As They Near $15 Trillion

Investors looking to bonds and bond ETFs for stability may face heightened volatility due to President-elect Donald Trump's approach to tariffs could put <a href="https://www.benzinga.com/topic/treasury-yields">upward pressure on yields</a>.
What Happened: Bond yields continue to climb after the Fed's 25-basis-point rate cut on Thursday. With the 10-year Treasury yield reached 4.34% in response to market speculation around Trump's fiscal agenda.
This shift complicates the Federal Reserve's efforts to ease borrowing costs, a concern for individual bondholders and bond ETFs investors. The backdrop of tax cuts and anticipated tariffs could limit the Fed's <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/11/41814589/why-trumps-boost-to-treasury-yields-inflation-expectations-may-weaken-feds-efforts-">ability to cut rates deeply</a>.
Also Read: <a href="https://www.benzinga.com/24/11/41886697/two-ideas-famed-stock-market-forecasters-agree-on-for-2025">Why Trump&#8217;s Win Has 2 Market Experts Betting On Small Caps, Financials</a>
Since mid-September, Treasury yields have surged by over 70 basis points, putting additional pressure on bond prices and impacting major bond ETFs. BofA Global Research has adjusted its outlook, with Treasury yields now projected in the 4.25%-4.75% range, Reuters reports. This rising yield environment creates challenges for bonds, as higher yields correspond to declining bond prices, which could erode returns for investors in bond ETFs.
Why It Matters: According to Reuters, the Committee for a Responsible Federal Budget estimates that Trump's proposed fiscal policies will add approximately $7.75 trillion to the national debt in a decade. Economists, banks and analysts have all warned that the <a href="https://www.benzinga.com/personal-finance/24/09/40961812/economists-warn-trumps-plans-for-tax-cuts-tariffs-and-deportation-could-trigger-skyrocketing-inf">plans will worsen inflation</a> and make debt unsustainable.
Bond ETFs, which offer exposure across various segments of the bond market, are likely to feel the impact of these fiscal pressures as bond yields trend higher.
Increased yields may lead to more appealing income for bond ETF investors but could also heighten risks related to price declines as yields continue to rise.
On Monday, 10 prominent bond ETFs were mainly trading lower:
<ul>
<li>Vanguard Total Bond Market ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BND#NASDAQ">BND</a>): $72.93, down 0.22%.</li>
<li>iShares Core U.S. Aggregate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AGG#NYSE">AGG</a>): $98.26, 0.25% lower.</li>
<li>SPDR Portfolio Aggregate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPAB#NYSE">SPAB</a>): $25.34, down 0.3%.</li>
<li>iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LQD#NYSE">LQD</a>): $109.60, 0.23% lower.</li>
<li>Vanguard Short-Term Corporate Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/VCSH#NASDAQ">VCSH</a>): $78.30, down 0.09%.</li>
<li>iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>): $91.93, down 0.6%.</li>
<li>Vanguard Intermediate-Term Corporate Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/VCIT#NASDAQ">VCIT</a>): $81.47, 0.22% lower.</li>
<li>iShares U.S. Treasury Bond ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/GOVT#BATS">GOVT</a>): $22.72, down 0.24%.</li>
<li>SPDR Bloomberg High Yield Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/JNK#NYSE">JNK</a>): $97.02, down 0.05%.</li>
<li>Vanguard Total International Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BNDX#NASDAQ">BNDX</a>): $49.94, up 0.09%</li>
</ul>
With rising bond yields and fiscal expansion under Trump, bond ETFs could continue to see volatility. 
Bond investors may need to weigh the attraction of higher yields against potential declines in bond prices, particularly in high-yield and long-term Treasury segments, where market shifts are expected to be most pronounced.
Read Next:
<ul>
<li><a href="https://www.benzinga.com/government/regulations/24/11/41885777/how-trumps-tax-cuts-tariffs-animal-spirits-could-shape-sp-500-earnings">How Trump&#8217;s Tax Cuts, Tariffs, &#8216;Animal Spirits&#8217; Could Shape S&amp;P 500 Earnings</a></li>
</ul>
Photo: Shutterstock

Bond ETFs Slide As Fed Cuts Clash With Trump's Fiscal Agenda

Undeterred by early August volatility, investors poured a staggering $75 billion into U.S. exchange-traded funds in August, a fivefold increase compared to the <a href="https://www.benzinga.com/etfs">same period last year.</a>
According to Bloomberg data, the strong August inflows into ETFs have pushed the year-to-date total to over $600 billion, putting 2024 on track to potentially challenge the all-time record of $911 billion in inflows, set in 2021 — a year before the Federal Reserve initiated its rate hike cycle.
Athanasios Psarofagis, an ETF analyst at Bloomberg Intelligence, highlighted that investors took advantage of the early August market dip to increase their equity ETF holdings. Additionally, there was a notable surge in demand for bond-related ETFs and small-cap ETFs as investors anticipate the start of the Federal Reserve's rate cuts.
<h3 class="wp-block-heading">ETF Market Nears $10 Trillion In Total Value</h3>
Bloomberg data reveals the total value of ETFs is approaching the $10-trillion mark, representing nearly one-third of the total value of all investment funds in circulation. Passive ETFs dominate this space with $8.7 trillion in assets, while actively managed ETFs have grown by 30% this year to $783 billion.
Both fixed-income and equity ETFs have seen strong inflows, with fixed-income products attracting $187 billion and equity ETFs $367 billion so far in 2024. 
Todd Sohn, an ETF strategist at Strategas, said bond ETFs have particularly benefited from an array of new offerings, including actively managed funds. Bond ETFs have attracted $100 billion over the last three months, surpassing the inflows seen during the early pandemic-recovery period in 2020.
Bitcoin-based ETFs have also gained traction, with net inflows exceeding $17 billion so far this year. Leveraged and inverse funds based on single companies have accumulated more than $9 billion in assets.
<h3 class="wp-block-heading">Top 5 ETFs By Inflows In August 2024</h3>
The following U.S.-listed ETFs saw the largest inflows of capital in August 2024:
<figure class="wp-block-table is-style-stripes"> 
<table>
<thead>
<tr>
<th>Fund</th>
<th>Fund flows in August 2024</th>
</tr>
</thead>
<tbody>
<tr>
<td>Vanguard S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VOO#NYSE">VOO</a>)</td>
<td>$5.964 bn</td>
</tr>
<tr>
<td>Vanguard Information Tech ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VGT#NYSE">VGT</a>)</td>
<td>$3.906 bn</td>
</tr>
<tr>
<td>iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>)</td>
<td>$3.038 bn</td>
</tr>
<tr>
<td>iShares Core S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IVV#NYSE">IVV</a>)</td>
<td>$2.49 bn</td>
</tr>
<tr>
<td>Vanguard Total Stock Market ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VTI#NYSE">VTI</a>)</td>
<td>$2.358 bn</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">Data: TradingView (as of Sept. 3)</figcaption></figure>
<h3 class="wp-block-heading">Year-To-Date ETF Inflow Leaders</h3>
Year-to-date, the top five ETFs by inflows are:
<figure class="wp-block-table is-style-stripes"> 
<table>
<thead>
<tr>
<th>Fund</th>
<th>YTD fund flows</th>
</tr>
</thead>
<tbody>
<tr>
<td>Vanguard S&amp;P 500 ETF</td>
<td>$60.648 bn</td>
</tr>
<tr>
<td>iShares Core S&amp;P 500 ETF</td>
<td>$43.532 bn</td>
</tr>
<tr>
<td>Vanguard Total Stock Market ETF</td>
<td>$21.098 bn</td>
</tr>
<tr>
<td>Invesco QQQ Trust, Series 1 (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>)</td>
<td>$19.329 bn</td>
</tr>
<tr>
<td>iShares Core U.S. Aggregate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AGG#NYSE">AGG</a>)</td>
<td>$14.152 bn</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">Data: TradingView (as of Sept. 3)</figcaption></figure>
Read Next:
<ul>
<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/09/40689742/goldman-sachs-bullish-on-gold-wall-street-giant-targets-2-700-by-early-2025-driven-">Goldman Sachs Bullish On Gold: Wall Street Giant Targets $2,700 By Early 2025, Driven By Geopolitical Risks, Fed Rate Cuts</a></li>
</ul>
Photo via Shutterstock.

US ETFs Attract $75 Billion In August, Push 2024 Inflows Over $600 Billion: 7 Investor Favorite Funds

Bond traders predict that the Federal Reserve&#8216;s<a href="https://www.benzinga.com/government/24/06/39506407/6-biggest-us-banks-ramp-up-buybacks-undeterred-by-stress-tests"> interest-rate cuts </a>will go well beyond what the agency has forecast for the next nine months.
Traders in the U.S. rates options market expect a much higher 3 percentage points worth of cuts by March. This dwarfs the Fed&#8217;s recent projections of just 25 basis points of reductions by the end of 2024 and a total 125-basis-point cut by the end of next year, Bloomberg <a href="https://www.bloomberg.com/news/articles/2024-06-25/bond-traders-boldly-bet-on-300-basis-points-of-fed-cuts-by-march?cmpid=BBD062624_OUS&amp;utm_medium=email&amp;utm_source=newsletter&amp;utm_term=240626&amp;utm_campaign=openamericas&amp;sref=TBDibEcD">reported</a>.
Options-market activity related to the secured overnight financing rate over the past three sessions show a significant upside if the Fed reduced its key rate by 300 basis points to 2.25% by next year&#8217;s first quarter.
Also Read: <a href="http://Bank Stocks Trend Upward As Fed Shares Possible Changes To Bank-Capital Overhaul">Bank Stocks Trend Upward As Fed Shares Possible Changes To Bank-Capital Overhaul</a>
This scenario would allow traders to hedge other investments, but it is an unlikely outcome unless the U.S. economy plummets into recession.
Investors have been keeping a close eye on economic data and remarks by Fed officials for any clues on the timing of eventual Fed easing while hedging against extreme rate cuts and other tail-risk outcomes.
Price Action:  iShares Core U.S. Aggregate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AGG#NYSE">AGG</a>) slipped 0.36% by early-afternoon trading on Wednesday, while Vanguard Total Bond Market ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BND#NASDAQ">BND</a>) declined 0.40%. Vanguard Total International Bond ETF (BNDX) slid 0.43%.
Now Read: <a href="https://www.benzinga.com/real-estate/24/05/38647920/homebuyers-get-mixed-news-from-freddie-mac-and-the-federal-reserve">Homebuyers Get Mixed News From Freddie Mac And The Federal Reserve</a>
Image: Shutterstock

Bond Traders Expect Much Deeper Interest Rate Cuts Than Projected

Markets are expecting the neutral rate &#8212; a theoretical rate that remains stable due to full employment and stable inflation &#8212; to stay higher than policymakers are forecasting. What does this mean for bond <a href="https://www.msn.com/en-us/money/markets/bond-etfs-unfazed-by-fed-decision-to-keep-rates-steady/ar-BB1ob69W">exchange-traded funds</a>?
A higher neutral rate may limit the Federal Reserve&#8217;s ability to cut interest rates, possibly causing headwinds for bonds, <a href="https://www.bloomberg.com/news/articles/2024-06-23/how-long-will-high-rates-last-bond-markets-say-maybe-forever?srnd=homepage-americas&amp;sref=TBDibEcD">Bloomberg </a>reports. 
Forward contracts on the five-year interest rate in the next five years — a proxy for the market's view of where U.S. rates might land — have stagnated at 3.6%. That is down from last year's peak of 4.5%, but it's still more than one full percentage point higher than the average over the past decade and above the Fed's own estimate of 2.75%.
This indicates the market is pricing in a much more elevated floor for yields, according to Bloomberg. This may limit bond performance, which might hamper investors&#8217; hopes for the kind of bond rally that saved them late last year.
Also read: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/06/39420979/us-economy-in-state-of-unstable-equilibrium-study-finds">US Economy &#8216;In State Of Unstable Equilibrium,&#8217; Study Finds</a>
Investor sentiment is rising steadily, but a Bloomberg gauge of Treasury returns was down just 0.3% in 2024 as of Friday, after shedding 3.4% for the year at its low point. Benchmark yields are down about half a percentage point from their year-to-date peak in April, Bloomberg reported.
The true level of the neutral rate, also known as R-Star, may take an upward trend that would reverse a decades-long downward drift on expectations for large and protracted government budget deficits and increased spending on battling climate change.
Further gains in bonds may require a more pronounced slowdown in inflation and growth to prompt interest rate cuts more quickly and deeply than the Fed currently envisions. A higher neutral rate would make this scenario less likely, according to Bloomberg.
Economists expect&nbsp;data next week&nbsp;to show that the Fed's preferred gauge of underlying inflation slowed to an annualized rate 2.6% last month from 2.8%. 
That is the lowest reading since March 2021, but it still exceeds the Fed's goal for 2% inflation. And the unemployment rate has been at or below 4% for more than two years, the best performance since the 1960s.
Price action: iShares Core U.S. Aggregate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AGG#NYSE">AGG</a>) was up 0.01%, the Vanguard Total Bond Market Index Fund (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BND#NASDAQ">BND</a>) was down 0.04% and the Vanguard Total International Bond Index Fund (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BNDX#NASDAQ">BNDX</a>) slipped 0.12% at the time of publication Monday.
Read Next:
<a href="https://www.benzinga.com/economics/macro-economic-events/23/12/36438336/investor-optimism-tested-navigating-2024-bond-markets-uncertain-terrain">Investor Optimism Tested: Navigating 2024 Bond Market&#8217;s Uncertain Terrain</a>
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Market's Higher Neutral Rate Expectations May Challenge Bond ETFs

The bond market remained stable on Thursday morning after <a href="https://www.benzinga.com/top-stories/24/06/39293034/exclusive-federal-reserve-to-hold-interest-rates-steady-wednesday-heres-how-investors-are-bracing-fo">the Federal Reserve</a> kept interest rates unchanged on Wednesday, as bond exchange-traded funds stayed flat in early-morning trading.
The Fed kept rates at a 23-year high of between 5.25% and 5.5% on Wednesday as it strives to lower the 3.3% inflation rate to 2%.
&#8220;The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent,&#8221; the agency said in a statement on Wednesday.
But policymakers have said they will start lowering rates once they are assured that inflation is heading toward the 2% target. They also scaled back its forecast from three rate cuts to just <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/06/39294739/how-mays-inflation-slowdown-could-influence-feds-next-move-insights-from-6-economis">one this year</a> after an inflation rose in early 2024.
&#8220;The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks,&#8221; the Fed said.
Read also: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/06/39271304/economists-feel-federal-reserve-will-lower-interest-rates-just-once-this-year-surve">Economists Feel Federal Reserve Will Lower Interest Rates Just Once This Year: Survey</a>
Several bond ETFs were trading higher at the time of publication Thursday.
Fidelity Total Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FBND#NYSE">FBND</a>) shares edged up 0.2% to $45.29, while iShares Core Total USD Bond Market ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/IUSB#NASDAQ">IUSB</a>) stock ticked up 0.24% to $45.43.
Stock held by iShares Core U.S. Aggregate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AGG#NYSE">AGG</a>) were up 0.29% to $97.61 on Thursday morning. Vanguard Tax-Exempt Bond Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VTEB#NYSE">VTEB</a>) shares went up 0.23% to $50.33.
The Fed also said it will keep lowering its holdings of Treasury securities and agency debt and agency mortgage‑backed securities as part of its 2% inflation goal.
&#8220;The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee&#8217;s goals,&#8221; the Fed said. 
&#8220;The Committee&#8217;s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments,&#8221; the central bank added.
Read now: <a href="https://www.benzinga.com/news/24/06/39304408/mohamed-el-erian-says-softer-than-expected-may-inflation-makes-a-solid-case-for-rate-cute-peter-schi">Mohamed El-Erian Says Softer Than Expected May Inflation Makes A &#8216;Solid Case&#8217; For Rate Cut, Peter Schiff Holds The View Latest Numbers Mean &#8216;Nothing&#8217; (CORRECTED)</a>
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IUSB

VTEB

Bond ETFs Unfazed By Fed Decision To Keep Rates Steady

The European Central Bank is universally <a href="https://www.benzinga.com//node/39029946">expected to cut interest rates for the Euro area this week</a>.
Cutting back on interest rates for the first time in two decades can be seen as a positive sign for the dwindling European economy, which has been hit by slow growth and poor demographic patterns.
Average inflation in Euro area countries has been mostly on a downward trend since last year, reaching an annual 2.4% in both March and April, down from a peak of 10.6% in October 2022.
The measure, however, is very dynamic within the block, with figures as low as 0.4% for Lithuania and as high as 4.9% in Belgium.
The ECB commenced its latest rate hike cycle in July 2022. Key ECB interest rates, the European counterpart for the federal funds rate, was hiked a total of 10 times and now stands at 4%. The same rate has been kept steady since September of last year.
June's cut will bring the rate down by 25 basis points to a floor of 3.75%.
Yet the steady pace towards the ideal measure of 2% annual inflation might be hitting a roadblock this month, as Eurostat, the block's main statistics office, is estimatfing that May's inflation has gone up to 2.6%, above estimates of 2.5%.
If the measure is confirmed, it won&#8217;t interfere with plans to lower interest rates. It might influence a decision by the ECB to pause rates during July and slow the speed of rate cuts down the line.
Bloomberg Economics has <a href="https://www.bloomberg.com/news/articles/2024-06-01/central-banks-latest-world-rate-paths-set-to-diverge-with-ecb-s-first-cut?sref=TBDibEcD">forecast</a> a pause in July and further cuts in September, October and December.
Read Also: <a href="https://www.benzinga.com/news/24/05/38951699/eu-approves-3-5b-in-frozen-russian-assets-for-ukraine-janet-yellen-has-a-plan-to-increase-amount-by">EU Approves $3.5B In Frozen Russian Assets For Ukraine: Janet Yellen Has A Plan To Increase Amount By Over 10X</a>
<h3 class="wp-block-heading">What This Means For US</h3>
Timing for the EU's latest inflationary cycle is in line with the U.S.'s wave of price increases. Both territories have been subject to the same variables. Energy prices, for example, are affected by the Ukraine/Russia war.
Yet the block's inflation is easing faster than in the U.S.
<a href="https://www.benzinga.com/markets/equities/24/05/38842603/us-inflation-falls-as-expected-in-april-bolsters-fed-rate-cut-bets">Yearly U.S. inflation was 3.4% in April</a>, down from 3.5% in March. 
On Friday, the Fed's preferred measure for inflation, the Personal Consumption Expenditure, was released for the month of April, showing <a href="https://www.benzinga.com/economics/macro-economic-events/24/05/39110198/feds-preferred-inflation-gauge-matches-estimates-personal-income-spending-slow-mo">a steady course, with a 2.7% annual rise as compared to the previous year</a>.
In a Monday interview, Minneapolis Fed President Neel Kashkari advocated for maintaining the current Fed funds rate in the U.S. for a longer period <a href="https://www.benzinga.com/24/06/39131539/feds-neel-kashkari-advocates-for-no-interest-rate-cut-until-we-get-a-lot-more-data-to-convince-us-am">to avoid the risk of jeopardizing U.S. economic prosperity</a>.
The EU's decision will further widen the gap with the cost of borrowing in the U.S., where the federal funds rate now stands at between 5.25% and 5.5%.
Canada is also expected to slash rates this week, in a decision to be confirmed on Wednesday, also widening the gap of borrowing cost across the Northern border, putting further pressure on the Fed to begin slashing rates sooner rather than later.
Canada's annual inflation rate also shows a better trajectory than its American counterpart, having dropped to 2.7% in April, down from 2.9% in March.
An upcoming <a href="https://www.benzinga.com/topic/jobs-report">jobs report</a> this Friday will further inform the Fed in its upcoming decisions. Economists are estimating the creation of 190,000 jobs in May.
<h3 class="wp-block-heading">Stocks And Other Assets To Watch </h3>
Fixed-income securities like government bonds tend to go up as interest rates are slashed.
Their prices will likely be affected by expectations around upcoming rate cuts in the U.S.
Last week, Bank of America chief investment strategist Michael Hartnett said <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/05/39116124/bank-of-america-strategist-shifts-to-bonds-stock-sell-off-prophecy-on-benign-inflat">he's bullish on bonds for the second half of the year as expectations</a> on rate cuts grow and may even become realized.
He said to "buy any dip in bond prices," while recommending to "sell the first cut" for stocks.
While there are many ways to <a href="https://www.benzinga.com/money/how-to-buy-bonds">buy government bonds</a>, investors can also access the bond market by purchasing bond ETFs like iShares Core US Aggregate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AGG#NYSE">AGG</a>) and Vanguard Total Bond Market Index Fund ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BND#NASDAQ">BND</a>).
<h3 class="wp-block-heading">Real Estate</h3>
The real estate market has been <a href="https://www.benzinga.com//node/39110330">one of the worst hit by the recent wave of rate increases</a>, as the cost of borrowing for both commercial and personal building and renovation has skyrocketed.
Expectations on rate cuts could turn out to be a lifeline for the sector, which is covered by ETFs like Vanguard Real Estate Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VNQ#NYSE">VNQ</a>), Schwab US REIT ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SCHH#NYSE">SCHH</a>) and Real Estate Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLRE#NYSE">XLRE</a>).
Now read: <a href="https://www.benzinga.com//node/38934737">EU Enacts World&#8217;s First AI Regulation, First Compliance Trigger Will Aim To Tackle AI Systems That Pose &#8216;Unacceptable&#8217; Risk</a>
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Pressure Mounts On Fed As Eurozone, Canada Plan Interest Rate Cuts This Week

The bond market is showing new signs of unpredictability as expectations over Fed rate cuts <a href="https://www.benzinga.com/opinion/24/03/37938028/exclusive-interest-rates-rode-the-elevator-up-but-analyst-predicts-theyll-take-the-stairs-coming-dow">shift with every new piece of economic data</a>.
Last week, Fed Chair Jerome Powell acknowledged that <a href="https://www.benzinga.com/economics/macro-economic-events/24/03/37857035/fed-chair-powell-opens-door-to-rate-cuts-this-year-downplays-recent-inflation-upt">rate cuts for this year are being decided on a meeting-by-meeting basis</a>. Therefore, it's not possible to predict how much the cost of borrowing will drop in 2024.
However, some investors <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/03/37900527/federal-reserve-pushes-stocks-to-record-highs-as-rate-cuts-loom-nvidia-rallies-appl">continue to price in at least three rate cuts this year</a>. This took the S&amp;P 500 and other market gauges to record heights last week.
Investors priced in significant rate cuts for 2024 during the first two months, as inflation showed consistent signs of easing. 
But rising prices from February's CPI report came in <a href="https://www.benzinga.com/markets/equities/24/03/37615483/inflation-rises-more-than-expected-to-3-2-rebuffs-expectations-of-june-fed-rate-cut">above economist expectations</a>. And stronger than expected economic activity shows that inflation could be harder to tame than many had hoped.
Meanwhile, the fear of <a href="https://www.benzinga.com/markets/equities/24/01/36614222/stagflation-in-2024-red-sea-crisis-could-trigger-domino-effect-for-global-costs">stagflation</a> is weighing on optimism. 
Read Also: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/03/37940764/commodities-poised-for-comeback-in-investor-portfolios-this-time-is-different-strat">Commodities Poised For Comeback In Investor Portfolios: &#8216;The Future Could Be Different,&#8217; Strategist Says</a>
How Treasury Notes Are Reacting: Treasury yields, which come down with interest rate cuts, continue to hang on attractive levels.
The yield on the 10-year U.S. The Treasury note was 4.25% on Tuesday, keeping the cost of borrowing money high for prospective homebuyers looking to get into a mortgage, as well as for corporate borrowers.
The 30-year fixed mortgage rate is still gravitating around 7%, which is <a href="https://www.benzinga.com/markets/equities/24/03/37855254/are-you-a-housing-market-lock-in-high-mortgage-rates-result-in-people-not-living-in-homes-they-w">negatively affecting the U.S. housing market</a>.
Yields on Treasury assets set the floor on mortgages and the general cost of borrowing, as mortgage lenders keep interest rates above bond yields in order to attract similar investors, who would otherwise just decide to invest in Treasury notes.
Yields on the 10-year note peaked at 5% in October of last year. They quickly dropped as it became apparent that the Fed's monetary policy was working. The 10-year Treasury yield went from 3.86% at the start of the year to today's 4.25%.
Investors today are <a href="https://www.wsj.com/finance/investing/treasury-yields-rising-fed-interest-rate-expectations-4a157a85?mod=hp_lead_pos11">more</a> moderate in their rate cut expectations. Current yields continue to reflect expectations that the Fed will cut rates in the future. They are now expecting that prediction to come true on a longer timescale.
Investors continue to expect yields to drop. The only thing that could take yields back to October's heights would be if the market receives very strong signals of economic acceleration, taking inflation back up again.
Retail investors can gain diversified exposure to the bond market by purchasing bond ETFs. The largest ones include Vanguard Total Bond Market Index Fund ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BND#NASDAQ">BND</a>), iShares Core US Aggregate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AGG#NYSE">AGG</a>) and iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>).
Now Read:<a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/03/37891092/5-technologies-that-could-be-worth-220-trillion-by-2030-cathie-woods-ark-predicts-t"> 5 Technologies That Could Be Worth $220 Trillion By 2030, Cathie Wood&#8217;s ARK Predicts &#8211; &#8216;The Time Is Now&#8217;</a>
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Bond Traders Think Interest Rate Cuts Are Ahead, But One Caveat Keeps Yields Above 4%

The S&amp;P 500 index, a bellwether for the U.S. stock market, ends February with a 5.3% surge, marking its fourth <a href="https://www.benzinga.com/markets">consecutive month of gains.</a>
Since the tumultuous days of late October, the broader stock market rally now nears an impressive 25% increase.
The tech-heavy Nasdaq 100 also paints a picture of extraordinary resilience. It surpassed the 18,000-point mark and closed the month at an all-time high. The surge in the Nasdaq 100, up 28% since late October, offers a testament to the unwavering appetite for tech-oriented investments. 
See Also: <a href="https://www.benzinga.com/markets/equities/24/02/37062104/joe-biden-says-stock-market-strength-is-sign-of-confidence-in-americas-economy-good-news">Joe Biden Says Stock Market Strength Is &#8216;Sign Of Confidence&#8217; In America&#8217;s Economy: &#8216;Good News&#8217;</a>
Within the captivating realm of exchange-traded funds (ETFs), here we highlight those commanding the largest influx of money throughout February.
Among these standouts, six offer exposure to broader equity indices, two pivots towards Treasury bonds, while one extends its focus on Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>).
<h3 class="wp-block-heading">Top 10 US ETFs By Inflows In February</h3>
<figure class="wp-block-table is-style-stripes"> 
<table>
<thead>
<tr>
<th>ETF</th>
<th>Fund Flows (1M)</th>
<th>AUM</th>
</tr>
</thead>
<tbody>
<tr>
<td>Vanguard S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VOO#NYSE">VOO</a>)</td>
<td>6.815B</td>
<td>413.71B</td>
</tr>
<tr>
<td>iShares Core S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IVV#NYSE">IVV</a>)</td>
<td>5.881B</td>
<td>442.69B</td>
</tr>
<tr>
<td>Vanguard Information Technology ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VGT#NYSE">VGT</a>)</td>
<td>5.786B</td>
<td>69.413B</td>
</tr>
<tr>
<td>iShares Bitcoin Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IBIT#NYSE">IBIT</a>)</td>
<td>3.891B</td>
<td>8.07B</td>
</tr>
<tr>
<td>Vanguard Intermediate-Term Treasury ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VGIT#NYSE">VGIT</a>)</td>
<td>3.1B</td>
<td>24.816B</td>
</tr>
<tr>
<td>SPDR Portfolio S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPLG#NYSE">SPLG</a>)</td>
<td>3.066B</td>
<td>31.938B</td>
</tr>
<tr>
<td>Vanguard Total Stock Market ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VTI#NYSE">VTI</a>)</td>
<td>2.819B</td>
<td>374.803B</td>
</tr>
<tr>
<td>iShares Core U.S. Aggregate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AGG#NYSE">AGG</a>)</td>
<td>2.348B</td>
<td>101.583B</td>
</tr>
<tr>
<td>Invesco QQQ Trust, Series 1 (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>)</td>
<td>1.874B</td>
<td>252.624B</td>
</tr>
<tr>
<td>iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>)</td>
<td>1.566B</td>
<td>48.99B</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">Source: TradingView</figcaption></figure>
On Friday, Feb. 9, the S&amp;P 500 index <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/02/37041128/s-p-500-claims-5-000-as-tech-soars-bitcoin-rockets-above-47-000-whats-driving-marke" target="_blank" rel="noreferrer noopener">topped 5,000 for the first time</a>.
This milestone prompted remarks from President Joe Biden. &#8220;The stock market going strong is a sign of confidence in America's economy,&#8221; he said on social media.
Now Read: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/02/37402333/exclusive-magnificent-7-takes-center-stage-in-roundhills-expanded-etf-lineup-with-i">EXCLUSIVE: Magnificent 7 Takes Center Stage In Roundhill&#8217;s Expanded ETF Lineup With Inverse And Leveraged Options</a>
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Investors Poured Nearly $40B Into 10 ETFs In February: Find Out What You're Overlooking

The traditional 60/40 investment portfolio has recorded a remarkable year of growth in 2023, sharply rebounding from a disappointing year in 2022. As of Dec. 27, the year-to-date performance of the 60/40 portfolio, benchmarked by the iShares Core Growth Allocation ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AOR#NYSE">AOR</a>), <a href="https://www.benzinga.com/money/what-is-the-60-40-investment-strategy">stands at approximately 13%. </a>
This performance figure ranks as the third-best year for the strategy since its inception in 2008, trailing only behind the strong years of 2009 and 2019.
As we enter the new year, investors are pondering whether the favorable conditions that supported both equities and bonds in the second half of the year will endure.
<h2 class="wp-block-heading">60/40 Portfolio In 2022-2023: From Downturn to Upswing</h2>
The 60/40 portfolio is a time-tested investment strategy known for its simplicity and effectiveness. It involves allocating 60% of the portfolio to stocks and 40% to bonds, with the aim to strike a balance between risk and reward.
Stocks offer the potential for higher returns but come with higher risk, while bonds generally provide lower but more stable returns. By combining both asset classes, the portfolio naturally diversifies, potentially reducing the risk of significant losses since stocks and bonds often react differently to market conditions.
In 2022, the traditional 60/40 portfolio faced one of its most challenging years due to the Fed&#8217;s aggressive interest rate hikes, which created strong headwinds for both equities and fixed-income assets.
The gauge fell as much as 17%, wiping out a sizable portion of the pandemic rally. 
An initial $1,000 investment in a 60/40 portfolio at the beginning of 2022 dipped to less than $800 by November of that year, only to rebound to its current value of $928.
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="650" height="650" src="https://editorial-assets.benzinga.com/wp-content/uploads/2023/12/27172235/newplot-5-1.jpeg" alt="" class="wp-image-170022" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2023/12/27172235/newplot-5-1.jpeg 650w,https://editorial-assets.benzinga.com/wp-content/uploads/2023/12/27172235/newplot-5-1-300x300.jpeg 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2023/12/27172235/newplot-5-1-150x150.jpeg 150w" sizes="(max-width: 650px) 100vw, 650px" /></figure>
However, as inflation subsided in 2023, traders began to anticipate a normalization of elevated interest rates, betting on the Federal Reserve reducing borrowing costs in 2024. 
Money markets currently factor in six rate cuts by 25 basis points next year, a figure substantially higher than the indications given by Federal Reserve officials at the latest meeting, with the dot-plot showing a median preference for 75-basis-point cuts. 
Read also: <a href="https://www.benzinga.com/23/08/33967223/why-the-6040-portfolio-rule-is-not-for-everyone-the-statistics-might-surprise-you">Why The 60/40 Portfolio Rule Is NOT For Everyone – The Statistics Might Surprise You</a>
<h2 class="wp-block-heading">Will the 60/40 Portfolio Continue to Rally in 2024?</h2>
Looking ahead to 2024, it remains to be seen whether the numerous rate cuts currently priced in by the market will be delivered by the Federal Reserve. 
If these rate cuts materialize, bond yields are likely to continue heading lower, benefiting fixed-income assets and potentially rate-sensitive stocks such as those in the technology, real estate, and financial sectors.
On the other hand, if the decline in inflation stalls or fresh pressures emerge, the Federal Reserve may find it inappropriate to deliver as many rate cuts as currently expected by market participants. 
This could lead to disappointment in the markets and potentially weigh on both equities and bonds.
In summary, the 60/40 portfolio has made a strong comeback in 2023, but its performance in 2024 will depend on whether the anticipated rate cuts materialize and how economic factors evolve.
<h2 class="wp-block-heading">5 Strategies to Create a 60/40 Portfolio</h2>
Aside from the iShares Core Growth Allocation ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AOR#NYSE">AOR</a>), there are several other ways for investors to construct a 60/40 portfolio. 
Here are seven different approaches an investor can use to replicate a 60/40 portfolio, with each pairing a stock ETF with a bond ETF:
<ol>
<li>S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) and iShares 20+ Year Treasury Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NYSE">TLT</a>): Combining SPY, which tracks the S&amp;P 500 Index, with TLT, focusing on long-term U.S. Treasury bonds, offers a balanced portfolio with exposure to the U.S. stock market and the stability of government bonds.</li>
<li>Vanguard Total World Stock ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VT#NYSE">VT</a>) and iShares Core U.S. Aggregate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AGG#NYSE">AGG</a>): VT provides global stock market exposure, while AGG tracks the U.S. Aggregate Bond Index, diversifying bond exposure.</li>
<li>iShares MSCI ACWI ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ACWI#NYSE">ACWI</a>) and Vanguard Total International Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNDX#NYSE">BNDX</a>): ACWI offers global equity exposure, and BNDX focuses on non-U.S. bonds, providing international diversification.</li>
<li>iShares Core S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IVV#NYSE">IVV</a>) and Vanguard Total Bond Market ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BND#NYSE">BND</a>): Similar to SPY, IVV tracks the S&amp;P 500, and BND provides diversified exposure to the U.S. bond market.</li>
<li>Vanguard Total Stock Market ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VTI#NYSE">VTI</a>) and Vanguard Total World Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNDW#NYSE">BNDW</a>): VTI offers exposure to the entire U.S. stock market, and BNDW provides a globally diversified bond exposure.</li>
</ol>
Read now: <a href="https://www.benzinga.com/economics/macro-economic-events/23/12/36403950/treasury-etf-and-real-estate-sector-rise-together-as-30-year-yields-dip-below-4">Treasury ETF And Real Estate Sector Rise Together As 30-Year Yields Dip Below 4%</a>
Photo: Shutterstock

Treasuries

ACWI

BNDW

60/40 Portfolio Bounces Back From 2022 Slump: Is It The Right Investment Strategy For 2024?

In recent weeks, several bond exchange-traded funds (ETFs) have experienced a significant surge in inflows, indicating a <a href="https://www.benzinga.com/money/best-bond-etf">heightened interest among investors. </a>
This shift coincided with a market that significantly upped bets on Federal Reserve rate cuts for 2024, backed by a robust and ongoing <a href="https://www.benzinga.com/topic/inflation">disinflationary trend</a> in the U.S. economy. 
Speculators have gone as far as factoring in an initial rate cut as early as March 2024, with whispers of a total of five rate cuts by December 2024.
But which bond ETFs are currently piquing investors&#8217; interest?
<h2 class="wp-block-heading">From &#8216;Cash-Like&#8217; to &#8216;Equity-Like&#8217;</h2>
While the third quarter in 2023 witnessed a notable uptick in inflows into cash-linked bond ETFs, primarily those investing in short-dated Treasury bonds and bills, the latest trends are veering towards more aggressive fixed-income strategies.
Investors are strategically positioning themselves in anticipation of an imminent U-turn in Fed&#8217;s monetary policy stance, eyeing a select group of bond ETFs that have weathered the storm during the recent spate of interest rate hikes.
Their bullish stance on riskier bond ETFs underscores a burgeoning belief that the bond market landscape could undergo a substantial recalibration in the coming months, as they brace for a more accommodating monetary policy environment.
These ETFs encompass a diverse range, including long-term Treasury bonds, emerging-market bonds, and high-yield corporate bonds. 
<h2 class="wp-block-heading">Top 10 Bond ETFs by Fund Inflows in the Past Month</h2>
<figure class="wp-block-table"> 
<table>
<thead>
<tr>
<th>Name</th>
<th>Fund Flows (1-month)</th>
</tr>
</thead>
<tbody>
<tr>
<td>iShares Trust &#8211; iShares iBoxx $ High Yield Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HYG#NYSE">HYG</a>)</td>
<td>$3.69 bn</td>
</tr>
<tr>
<td>iShares Trust &#8211; iShares Core U.S. Aggregate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AGG#NYSE">AGG</a>)</td>
<td>$2.62 bn</td>
</tr>
<tr>
<td>SPDR Series Trust &#8211; SPDR Bloomberg High Yield Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/JNK#NYSE">JNK</a>)</td>
<td>$1.99 bn</td>
</tr>
<tr>
<td>iShares Trust &#8211; iShares J.P. Morgan USD Emerging Markets Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/EMB#NASDAQ">EMB</a>)</td>
<td>$1.89 bn</td>
</tr>
<tr>
<td>iShares Trust &#8211; iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>)</td>
<td>$1.62 bn</td>
</tr>
<tr>
<td>Vanguard Bond Index Funds &#8211; Vanguard Total Bond Market ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BND#NASDAQ">BND</a>)</td>
<td>$1.56 bn</td>
</tr>
<tr>
<td>iShares Trust &#8211; iShares Broad USD High Yield Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USHY#NYSE">USHY</a>)</td>
<td>$1.31 bn</td>
</tr>
<tr>
<td>Vanguard Scottsdale Funds &#8211; Vanguard Long-Term Treasury ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/VGLT#NASDAQ">VGLT</a>)</td>
<td>$665.99 bn</td>
</tr>
<tr>
<td>Vanguard Charlotte Funds &#8211; Vanguard Total International Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BNDX#NASDAQ">BNDX</a>)</td>
<td>$641.06 bn</td>
</tr>
<tr>
<td>iShares Trust &#8211; iShares 5-10 Year Investment Grade Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IGIB#NYSE">IGIB</a>)</td>
<td>$216.67 bn</td>
</tr>
</tbody>
</table>
</figure>
Read Now: <a href="https://www.benzinga.com/etfs/specialty-etfs/23/12/36075348/golds-record-high-why-havent-gold-miners-followed-suit">Gold&#8217;s Record High: Why Haven&#8217;t Gold Miners Followed Suit?</a>
Photo: Shutterstock

Emerging Markets

Emerging Market ETFs

iShares JPMorgan USD Emerging Markets Bond Fund

IGIB

USHY

VGLT

Investors Pour Billions To Aggressive Bond ETFs, Banking On Multiple Fed Rate Cuts in 2024

The U.S. dollar made something of a comeback in the last two days of November, following a month of losses as markets leveraged rising expectations the Federal Reserve will start cutting rates in the first <a href="https://www.benzinga.com/analyst-ratings/analyst-color/23/11/36028726/we-are-now-at-the-soft-landing-economists-markets-react-to-subdued-pce-inflation-da">quarter of 2024.</a>
Although the dollar index (DXY) was fractionally lower on Friday, during the final two days of November the DXY gained a cumulative 0.6%.
But analysts believed the rally would be short-lived while equities continued to surge and rate cut optimism remained high. Bank of America FX strategist Athanasios Vamvakidis said: &#8220;We are bearish on the dollar into 2024 — we could see a correction from oversold positions into the year end, but would sell the bounce for a 2024 decline.&#8221;
Also Read: <a href="https://www.benzinga.com/markets/equities/23/11/35985582/dollar-decline-stock-market-rally-explains-70-of-recent-us-dollar-downtrend-says-bofa">Dollar Decline: Stock Market Rally Explains 70% Of Recent US Dollar Downtrend</a>
<h2 class="wp-block-heading">Dollar Decoupling</h2>
In November, as investors&#8217; appetite for risk led to major gains in the equity markets, the dollar largely diverged from its usual drivers tied to the economy, geopolitics, and policy. Instead, it became the anti-equity trade.
As the S&amp;P 500 stock index climbed 8.9% during November, the dollar index (DXY) fell 3.1%. During the same period, the SPDR S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), an exchange-traded fund that tracks the S&amp;P 500, gained 9.1%.
Among the major currency crosses, the dollar&#8217;s worst performance during November was against the New Zealand dollar (NZD/USD) — down 4.6%. The dollar lost 3.6% versus the British pound (GBP/USD) and was down 2.6% against the euro (EUR/USD).
The performance of exchange traded funds tracking investment behavior in the dollar also illustrated market sentiment towards the U.S. currency. The Invesco DB USD Index Bullish Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UUP#NYSE">UUP</a>) fell 2.5% during November, while the Invesco DB US Dollar Index Bearish Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UDN#NYSE">UDN</a>) rose 3.3%.
<h2 class="wp-block-heading">Treasury Market Rally — Yields Retreat From 5%</h2>
The biggest market driver during the month was rising expectations that the Federal Reserve had ended its cycle of interest rate hikes, after the central bank left its main Fed Funds Rate at 5.25%-5.5% at its September and November policy meetings.
Expectations of a more dovish Fed at the Dec. 13 meeting were further driven by data that showed <a href="https://www.benzinga.com/analyst-ratings/analyst-color/23/11/36028726/we-are-now-at-the-soft-landing-economists-markets-react-to-subdued-pce-inflation-da">inflation becoming more benign</a>. Consumer price data in early November showed the annual headline inflation rate dropping to 3.2%, while the rate as measured by personal consumption expenditures — the Fed&#8217;s favored measure — fell to 3%. The Fed&#8217;s target rate is 2%.
Hopes of a more dovish Fed also spurred a rally in the U.S. government bonds market. Prices climbed, driving yields lower from 16-year highs. Having peaked at 5.02% in October, the 10-year Treasury yield was down to 4.32% on Friday.
The iShares Core U.S. Aggregate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AGG#NYSE">AGG</a>), an exchange traded fund that tracks the broad U.S. bond market, gained 4.3% during November.
Now Read: <a href="https://www.benzinga.com/news/23/11/36004201/november-rally-sets-treasury-bonds-on-track-for-best-month-in-40-years">November Rally Sets Treasury Bonds On Track For Best Month In 40 Years</a>
Photo: Shutterstock

Currency ETFs

Forex

PowerShares DB US Dollar Index Bearish Fund

PowerShares DB US Dollar Index Bullish Fund

Dollar Dumps In November As Fed Rate Cut Optimism Increases

U.S. government bonds are on track for their best month in nearly 40 years following a summer and early autumn sell off that saw foreign buyers all but <a href="https://www.benzinga.com/news/23/11/35856564/foreign-buyers-desert-us-treasury-bond-market-as-supply-increases">desert the Treasury markets</a>.
The dramatic turnaround in November came as Treasury yields dropped from 16-year highs — with the benchmark 10-year yield <a href="https://www.benzinga.com/federal-reserve/23/10/35401487/10-year-treasuries-exceed-5-for-first-time-since-2007-then-crater-on-ackman-short-cover">hitting 5%</a> in late October — thanks to growing optimism that the Federal Reserve&#8217;s next policy move will be a rate cut, possibly in the first quarter of 2024.
The Bloomberg U.S. Aggregate Bond index (Agg), which tracks total returns on US bonds, is up 4.3% in November, setting it up for its best monthly percentage gain since 1985.
Similarly, the iShares Core U.S. Aggregate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AGG#NYSE">AGG</a>), an exchange traded fund that tracks the Bloomberg benchmark, is up 4.1% so far this month — its best monthly performance since December 2008.
Also Read: <a href="https://www.benzinga.com/federal-reserve/23/10/35401487/10-year-treasuries-exceed-5-for-first-time-since-2007-then-crater-on-ackman-short-cover">10-Year Treasuries Exceed 5% For First Time Since 2007</a>
<h2 class="wp-block-heading">Spring/Autumn Treasury Sell-Off</h2>
Earlier this month data from the Treasury department showed that foreign buyers, including the central banks of Japan and China, were <a href="https://www.benzinga.com/news/23/11/35856564/foreign-buyers-desert-us-treasury-bond-market-as-supply-increases">net sellers of U.S. bonds</a> in September to the tune of $1.7 billion.
The Bloomberg Agg index suggests investors were net sellers between May and October. Indeed, Oct. 23 saw the yield on the 10-year Treasury peak at a 16-year high of 5.021% — when yields move higher Treasury prices move lower as investors sell.
So, what&#8217;s bought buyers back into the market? Even on the day the 10-year yield hit its peak, it ended lower on the day at 4.85%. Some of the bond buying came from hedge fund short sellers, <a href="https://www.benzinga.com/federal-reserve/23/10/35401487/10-year-treasuries-exceed-5-for-first-time-since-2007-then-crater-on-ackman-short-cover">including Bill Ackman&#8217;s Pershing Square Capital Management</a>, who were covering their positions.
Then the Federal Reserve, at its Nov. 1 policy meeting, held interest rates steady for the second consecutive meeting, spurring hopes among Treasury and equity investors that its rate-hike cycle was over.
<h2 class="wp-block-heading">Inflation Rate Drops</h2>
Hopes of a more dovish policy stance from future Fed meetings were raised by U.S. inflation data that showed headline consumer prices had dropped to 3.2% in October — creeping down towards the Fed&#8217;s 2% target rate.
&#8220;It is clear from the sharpness of the move across asset markets in the past week or two, that the CPI inflation release was a pivotal moment in the market's interpretation of the outlook for Fed interest rate policy,&#8221; said Jane Foley, senior FX strategist at Rabobank.
The benchmark 10-year yield stood at 4.29% on Wednesday morning, still higher than the 3.7% at which it started the year, but at a level that is now attracting buyers again.
Now Read: <a href="https://www.benzinga.com/news/23/11/35856564/foreign-buyers-desert-us-treasury-bond-market-as-supply-increases">Foreign Buyers Desert US Treasury Bond Market As Supply Increases</a>
Photo: Shutterstock

Short Sellers

November Rally Sets Treasury Bonds On Track For Best Month In 40 Years

Investors have accumulated record amounts of cash and equivalent assets as a way to hedge against the <a href="https://www.benzinga.com/analyst-ratings/analyst-color/23/10/35150923/why-this-cboe-global-markets-analyst-is-bullish-at-time-of-geopolitical-turmoil">volatility of recent times.</a>
Now, fund managers are urging investors to put that money to work, as decreasing inflation and the potential for an economic slowdown may lead to profitable opportunities in the bond markets.
<a href="https://www.ici.org/research/stats/mmf">According</a> to ICI Global, capital invested into money market fund assets reached a record of $5.73 trillion last week. Money market funds are characterized by having very low volatility and very high liquidity, holding large amounts of cash and other low-risk securities in their portfolios.
Investors tend to lean towards money market investing in times of uncertainty, when availability of cash is a prime concern and tolerance to risk is low. Money market funds give better returns than cash deposits on banks, which is why investors have been flocking towards these assets since the Fed began its tightening cycle last year, which has now taken the federal funds rate to between 5.25% and 5.50%.
But, with <a href="https://www.benzinga.com/analyst-ratings/analyst-color/23/11/35783516/october-inflation-drop-triggers-markets-rally-economists-reassess-after-surprising-">inflation dropping to more comfortable levels</a>, bond managers are suggesting that now is an optimal time to allocate some of those assets into the bond market.
Minutes from the Federal Open Market Committee&#8217;s November meeting revealed that Fed participants view the current interest rate level of between 5.25% and 5.5% as restrictive, potentially signaling the end of their intensive rate hike campaign in light of recent positive inflation data and acknowledging the significant tightening of financial <a href="https://www.benzinga.com/economics/macro-economic-events/23/11/35903926/november-fomc-minutes-fed-leans-toward-rate-stability-as-inflation-eases">conditions in recent months.</a>
Also Read: <a href="https://www.benzinga.com/news/23/11/35905071/musk-and-the-magnificent-9-how-worlds-10-richest-people-bagged-400b-in-2023">Musk And The Magnificent 9: How World&#8217;s 10 Richest People Bagged $400B In 2023</a>
Greg Whiteley, head of Government Securities Investing at DoubleLine <a href="https://www.bloomberg.com/news/articles/2023-11-21/bond-managers-of-2-5-trillion-make-case-for-leaving-cash-behind?srnd=premium&amp;sref=TBDibEcD">told</a> Bloomberg that the range of 4.5% to 5% yield "is a safe place to be buying bonds."
The two-year treasury bond currently yields at 4.89% while the 5- and 10-year bonds have a yield of 4.44%.
Whiteley and other fund managers contend that the Federal Reserve&#8217;s actions are effectively slowing down the economy, a necessary step to reduce inflation back to the 2% target. Economist Gary Shilling <a href="https://www.benzinga.com/analyst-ratings/analyst-color/23/11/35867664/legendary-economist-foresees-30-drop-in-stocks-predicts-recession-and-feds-credibil">this week predicted that a recession is imminent</a>, potentially including a 30% drop in stock values, which further supports the strategy of redirecting investments towards safer and comparatively higher-yielding assets such as bonds.
Piper Sandler strategist Michael Kantrowitz echoed the same prediction over the weekend, based on several data points coming<a href="https://www.benzinga.com/analyst-ratings/analyst-color/23/11/35866823/top-wall-street-strategist-expresses-worries-about-looming-recession-we-are-at-the-"> from housing, profits, and employment.</a> 
The housing market showed a slight uptick last week but<a href="https://www.benzinga.com/news/23/11/35836886/housing-market-shows-a-slight-uptick-but-remains-slow-ahead-of-beazer-homes-earnings-call"> continues at historically low levels</a>, with mortgage rates sustaining prices that are unaffordable for the majority of homebuyers.
Other economists, however, lean towards a soft-landing scenario, which would mean a return to pre-pandemic<a href="https://www.benzinga.com/analyst-ratings/analyst-color/23/11/35820947/us-economy-gearing-towards-soft-landing-amid-inflation-concerns-says-economists"> inflation levels without a recession</a>.
Bond fund managers argue that sticking to cash "means you miss all the potential price appreciation if the economy starts to slow," as Ryan Murphy of Capital Group told Bloomberg.
The managers also pointed to <a href="https://www.benzinga.com/money/what-are-mortgage-backed-securities">mortgage bonds</a> as a sector that could lift off next year if interest rates come down. Mortgage-backed securities consist of pools of mortgages that lenders bundle together and sell as securities to third parties in order to free up more cash to continue lending.
While these securities gained a bad reputation for their role in the 2008 financial crash, increased regulation has made them appealing again. Although they still carry more risk than cash or government bonds, they're generally considered less risky than corporate bonds, because there&#8217;s real estate as collateral, and they carry less volatility than stocks.
These include Vanguard Total Bond Market ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BND#NASDAQ">BND</a>) and iShares Core US Aggregate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AGG#NYSE">AGG</a>) for the broad ranging bond market, and iShares MBS ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MBB#NASDAQ">MBB</a>) as well as Vanguard Mortgage-Backed Securities ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/VMBS#NASDAQ">VMBS</a>) for specific exposure to mortgage-backed securities.
Now Read: <a href="https://www.benzinga.com/fintech/23/11/35904576/sam-altman-in-discussions-about-openai-return-as-employees-revolt-and-msft-picks-up-the-pieces">Sam Altman In Discussions About OpenAI Return As Employees Revolt, Microsoft Picks Up The Pieces</a>
Image by Shutterstock.

VMBS

Ready For Recession? Fund Managers Advocate Shift To Treasury, Mortgage Bonds

As the market eagerly awaits the next CPI report, the overarching question remains: Is the U.S. economy on track to hit the Fed&#8217;s 2% inflation target, or are we grappling with <a href="https://www.benzinga.com/economics/macro-economic-events/23/09/34370284/august-cpi-preview-investors-brace-for-inflation-uptick-headache-looms-for-powell">more tenacious inflationary trends?</a>
The July Curveball and What&#8217;s In Store For August: Despite a year-long trend of dropping annual inflation rates, July threw us a curve with a jump from 3% to 3.2% — slightly under the anticipated 3.3%.
Expectations point to headline inflation increasing to 3.6% YoY. On a monthly basis, the CPI is projected to advance by 0.6%, marking an acceleration from the 0.2% uptick in July. The factor to blame? Just look at oil prices. 
But here&#8217;s the twist &#8211; core inflation, often a truer tell of the underlying inflationary pressures, might dial down from 4.7% to 4.3%.
Read also: <a href="https://www.benzinga.com/etfs/specialty-etfs/23/09/34335973/the-biggest-short-trader-bets-30k-on-1-100-vix-spike-by-february-2024">The Biggest Short: Trader Bets $30K On 1,100% VIX Spike By February 2024</a>
Market Speculations: Mixed inflation signals have investors buzzing about possible market movements post the August CPI release, which is set to occur on Sept. 13 at 8:30 a.m. ET.
Here&#8217;s a recap of how five major ETFs moved following prior CPI announcements.
1. SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>)
<ul>
<li>Aug. 10, 2023: On the day July&#8217;s CPI data came out, SPY barely blinked, staying flat. However, the following week was less serene, with the ETF sliding down by 2%.</li>
<li>July 12, 2023: June&#8217;s CPI report seemed to spark some optimism. The SPY appreciated 0.8% on the back of the lower-than-anticipated figures, then maintained its momentum, climbing another 2% over the ensuing week.</li>
<li>June 13, 2023: Once again, a softer inflation report led to a boost in investor confidence. SPY went up by 0.7% on the release day, and broadly maintained that level in the subsequent week.</li>
</ul>
2. iShares Core U.S. Aggregate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AGG#NYSE">AGG</a>)
<ul>
<li>Aug. 10, 2023: AGG fell 0.7% on the day and slid another 1% the following week after July&#8217;s CPI release.</li>
<li>July 12, 2023: Following June&#8217;s CPI, AGG gained 0.8% immediately and added another 0.8% over the week.</li>
<li>June 13, 2023: Post-May&#8217;s CPI data, AGG dipped 0.5% but rebounded with a 0.8% rise in the subsequent week.</li>
</ul>
3. SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>)
<ul>
<li>Aug. 10, 2023: GLD dipped 0.1% on release day and went down another 1.3% over the week post-July&#8217;s CPI.</li>
<li>July 12, 2023: After June&#8217;s CPI, GLD surged 1.4% on the day and then added 0.5% in the week.</li>
<li>June 13, 2023: Post-May CPI, GLD dropped 0.7% and declined another 0.4% during the week.</li>
</ul>
4. iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>)
<ul>
<li>Aug. 10, 2023: Small-cap stocks tracked by the IWM ETF fell 0.4% on release day and went down another 3.7% over the week post-July&#8217;s CPI.</li>
<li>July 12, 2023: After June&#8217;s CPI, IWM rose 1.1% on the day and then added 2.6% in the week.</li>
<li>June 13, 2023: Post-May CPI, IWM saw a solid 1.1% rise and then declined 1.4% through the week.</li>
</ul>
5. iShares 20+ Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>)
<ul>
<li>Aug. 10, 2023: TLT took a hit of 1.7% on the day following July&#8217;s CPI and deepened its decline by 2.3% over the subsequent week.</li>
<li>July 12, 2023: In response to June&#8217;s CPI, TLT surged 1.1% and continued its ascent, marking a 2% rise throughout the week.</li>
<li>June 13, 2023: Post-May&#8217;s CPI figures, TLT saw a 1% drop but rebounded with a notable 2.1% gain in the week that followed.</li>
</ul>
Read now: <a href="https://www.benzinga.com/markets/equities/23/09/34372193/oil-climbs-iphone-faces-china-ban-uaw-strike-looms-the-week-in-the-markets">Oil Climbs, iPhone Faces China Ban, UAW Strike Looms: The Week In The Markets</a>
Photo: Shutterstock

CPI Report Countdown: 5 ETFs Bracing For August's Inflation Numbers

The bond market in 2023 has not experienced the rally that many expected at the beginning of the year, following nightmarish performance in 2022 and rising expectations of a <a href="https://www.benzinga.com/economics/macro-economic-events/23/07/33099550/attention-shifts-to-fed-minutes-volatility-may-resume-this-week-as-markets-do-not" target="_blank" rel="noreferrer noopener">Fed policy turn.</a> 
Yet investor inflows into bond-related ETFs are running hot these days, fueled by bets that the fixed-income market will soon reverse this trend. 
The iShares Core U.S. Aggregate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AGG#NYSE">AGG</a>), the second-largest bond ETF in the world with $92 billion in assets under management, has seen significant inflows of $5.4 billion in the second quarter of 2023, matching its best quarter ever in the second quarter of 2020, according to Koyfin data. 
Despite the strong inflow momentum, the performance of the U.S. corporate investment-grade market has been negative in 2023, down 0.4% year-to-date. The investment grade bond market still remains 15% lower than its level at the beginning of 2022 and 18.6% below its record highs of 2020.
<h2 class="wp-block-heading">No US Recession, Hawkish Fed Prevent Bond Rally in 2023</h2>
The bond market&#8217;s failure to rally in 2023 can be attributed to a stronger-than-expected U.S. economy and job market, both of which have materially reduced risks of a recession. This has led the Federal Reserve to keep focusing on combating inflation through further interest rate hikes, which hurt fixed-income assets. 
Bond bulls who expected a Fed reversal and priced in rate cuts this year have seen their optimistic expectations significantly reduced by the resiliency of the U.S. economy.
Compared to the lows of October 2022, the U.S. bond market ETF has only gained 4.5%, while the S&amp;P 500 Index, tracked by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), has gained 27.6%. This stark performance difference highlights the clear overperformance of stocks compared to bonds in the first half of 2023.
<a href="https://www.benzinga.com/money/best-bond-funds" target="_blank" rel="noreferrer noopener">Read more: Best Bond Funds in July 2023</a>
<h2 class="wp-block-heading">Chart: US IG Bonds Have Barely Recovered From 2022 Rout</h2>
<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="850" src="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/07/05101702/AGG_2023-07-05_16-16-49_33942-1024x850.png" alt="" class="wp-image-62594" srcset="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/07/05101702/AGG_2023-07-05_16-16-49_33942-1024x850.png 1024w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/07/05101702/AGG_2023-07-05_16-16-49_33942-300x249.png 300w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/07/05101702/AGG_2023-07-05_16-16-49_33942-768x637.png 768w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/07/05101702/AGG_2023-07-05_16-16-49_33942.png 1482w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
<h2 class="wp-block-heading">As Yields Rise, Bond Bulls Become Even More Bullish</h2>
Despite the lackluster performance of the bond market in 2023, some of the largest bond managers, such as Brandywine Global Investment Management, Columbia Threadneedle Investments and Vanguard Group Inc., maintain a bullish view on the U.S. debt market.
These managers are confident that a strong fixed-income rally is on the horizon. They are hesitant to give up now&nbsp;that&nbsp;ultra-safe Treasury bills yielding around 5% represent an appealing opportunity today.
Roger Hallam, global head of rates at Vanguard Asset Management, recently said &#8220;the bonds-are-back narrative still holds,&#8221; adding that fixed-income assets offer &#8220;attractive coupons and ballast to a portfolio, and as you saw in March, if things go badly, bonds can rally a lot."
&#8220;For 2024, I put my chips on the market that the lagged effects of tightening means the Fed will cut," said Gene Tannuzzo, global head of fixed income at Columbia Threadneedle Investments. 
Yields on U.S. investment-grade corporate bonds are averaging around 5.6%, a significant increase from 2.3% at the start of 2022 and the low of 1.8% in 2021.
<h2 class="wp-block-heading">Chart: IG Bond Yields Surge To 5.6%, While 2-Year Treasury Yields Near 5%</h2>
<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="766" src="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/07/05101314/BAMLC0A0CMEY_2023-07-05_16-12-59_0ec21-1024x766.png" alt="" class="wp-image-62592" srcset="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/07/05101314/BAMLC0A0CMEY_2023-07-05_16-12-59_0ec21-1024x766.png 1024w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/07/05101314/BAMLC0A0CMEY_2023-07-05_16-12-59_0ec21-300x224.png 300w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/07/05101314/BAMLC0A0CMEY_2023-07-05_16-12-59_0ec21-768x575.png 768w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/07/05101314/BAMLC0A0CMEY_2023-07-05_16-12-59_0ec21-1536x1149.png 1536w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/07/05101314/BAMLC0A0CMEY_2023-07-05_16-12-59_0ec21.png 1644w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
Photo via Pixabay.

Is the Bond Market Poised For Takeoff In The Second Half? US Aggregate Bond ETF Sees Record Inflows

The SPDR S&amp;P 500 ETF Trust (ARCA: SPY) experienced an outstanding $18.1 billion in net inflows in May, the greatest flow performance since December 2021, when the fund received $25.6 billion, according to Koyfin data.
The ETF is the world&#39;s biggest with approximately $400 billion in assets under management.
The influx into the largest ETF tracking the S&amp;P 500 index corresponded with a remarkable rise in AI-related stocks and the rising dominance of tech giants among the <a href="https://www.benzinga.com/quote/SPY/news" target="_blank">500 most capitalized U.S. firms</a>.&nbsp;
Tech Supremacy: The technology and communication services sectors account for around 37% of the total S&amp;P 500 index. Within this niche, the combined weight&nbsp;of five tech titans&nbsp;accounts&nbsp;for around 25% of the index:&nbsp;Apple&nbsp;Inc&nbsp;(NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/aapl#NASDAQ">AAPL</a>) at 7.9%, Microsoft Corp. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/msft#NASDAQ">MSFT</a>) at 7%, Alphabet Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/goog#NASDAQ">GOOG</a>) (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/googl#NASDAQ">GOOGL</a>) at 3.9%, Amazon.com,&nbsp;Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/amzn#NASDAQ">AMZN</a>) at 3.1%, and NVIDIA Corporation&nbsp;(NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/nvda#NASDAQ">NVDA</a>) at 2.7%. An equally weighted portfolio made up of these five S&amp;P 500&nbsp;heavyweights would have gained 62% so far in 2023, compared to the 9.7% performance of the market.&nbsp;
As these stocks gathered speed and rose in relative weight, investors seized the opportunity to <a href="https://www.benzinga.com/topic/artificial-intelligence" target="_blank">profit from a potential AI boom.</a>
Other ETFs Flows To Know: The Invesco QQQ Trust Series 1&nbsp;(NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/qqq#NASDAQ">QQQ</a>), the biggest ETF tracking the Nasdaq 100 index, witnessed $1.8 billion in net inflows last month, the best monthly performance so far in 2023.&nbsp;
<ul>
<li>The SPDR Dow Jones Industrial Average ETF Trust (ARCA: DIA) recorded $232 million in net inflows last month, following five consecutive months of outflows.&nbsp;</li>
<li>The SPDR Gold Trust&nbsp;(ARCA: GLD), printed $873 million in net inflows in May, the highest since March 2022.&nbsp;</li>
<li>Value-oriented ETFs had withdrawals, while growth-oriented ETFs saw inflows. The&nbsp;<a href="https://www.benzinga.com/money/vanguard-review/">Vanguard</a> Value Index Fund ETF (ARCA: VTV) witnessed $3.75 billion in outflows. The Vanguard Growth Fund ETF (ARCA: VUG) posted $1.5 billion in inflows.</li>
<li>Investors withdrew money from&nbsp;the Energy Select Sector SPDR Fund (ARCA: XLE) and&nbsp;the Financial Select Sector SPDR Fund (ARCA: XLF), which saw outflows of $1.6 billion and $2.4 billion, respectively.&nbsp;</li>
<li>Inflows were recorded&nbsp;by the Communication Services Select Sector SPDR Fund (ARCA: XLC) at $636 million&nbsp;and the&nbsp;Technology Select Sector SPDR Fund (ARCA: XLK) at $23.5 million.</li>
<li>Finally, iShares Core U.S. Aggregate Bond ETF (ARCA: AGG), the largest ETF tracking&nbsp;investment-grade U.S. bonds, had $3.2 billion in net inflows, the highest since February 2022 and the third largest monthly flow ever.&nbsp;</li>
</ul>
<table border="1" cellpadding="1" cellspacing="1" style="width:500px">
<thead>
<tr>
<th scope="col">ETF</th>
<th scope="col">AUM</th>
<th scope="col">Flows in May 2023</th>
</tr>
</thead>
<tbody>
<tr>
<td>SPDR S&amp;P 500 ETF Trust</td>
<td>$397bn</td>
<td>$18.1bn</td>
</tr>
<tr>
<td>iShares Core U.S. Aggregate Bond ETF</td>
<td>$91.1bn</td>
<td>$3.2bn</td>
</tr>
<tr>
<td>Invesco QQQ Trust</td>
<td>$189bn</td>
<td>$1.8bn</td>
</tr>
<tr>
<td>Vanguard Growth ETF</td>
<td>$86bn</td>
<td>$1.5bn</td>
</tr>
<tr>
<td>SPDR Gold Trust</td>
<td>$59.3bn</td>
<td>$0.87bn</td>
</tr>
<tr>
<td>Communication Services Select Sector SPDR Fund</td>
<td>$12.3bn</td>
<td>$0.64bn</td>
</tr>
<tr>
<td>SPDR Dow Jones Industrial Average ETF Trust</td>
<td>$27.7bn</td>
<td>$0.23bn</td>
</tr>
<tr>
<td>Technology Select Sector SPDR Fund</td>
<td>$47bn</td>
<td>$0.02bn</td>
</tr>
<tr>
<td>Energy Select Sector SPDR Fund</td>
<td>$33bn</td>
<td>-$1.6bn</td>
</tr>
<tr>
<td>Financial Select Sector SPDR Fund</td>
<td>$28.6bn</td>
<td>-$2.4bn</td>
</tr>
<tr>
<td>Vanguard Value ETF</td>
<td>$94.5bn</td>
<td>-$3.8bn</td>
</tr>
</tbody>
</table>
Read now:&nbsp;<a href="https://www.benzinga.com/markets/penny-stocks/23/06/32672024/short-interest-sector-focus-consumer-cyclical-sector" target="_blank">Short Interest Sector Focus: Consumer Cyclical Sector</a>
Photo: Shutterstock
<ul>
</ul>
&nbsp;

AAPL

AMZN

SPDR Dow Jones Industrial Average ETF Trust

GOOG

GOOGL

MSFT

NVDA

ETFs Flows to Watch: SPY Attracts Staggering $18B Inflows in May, The Highest Since December 2021, As Investors Jump On AI Rally

&lsquo;Big Short&rsquo; investor <a href="https://www.benzinga.com/topic/michael-burry">Michael Burry</a>&nbsp;expressed skepticism on the&nbsp;global economic environment and questioned whether it could be worse than the 2008 financial crisis in September 2022.
What Happened: The investor, who made his fortune betting against the housing market in the years leading to 2008, shared a link to a story that discussed the Dow&rsquo;s largest single-day drop on Sept. 29, 2008, when the House voted against a proposed $700-billion rescue of the financial system. The index had dropped 777 points, its largest single-day drop in history until that point.
See Also: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/23/02/31000993/jim-cramer-lists-6-conditions-for-market-selloff-to-end-amid-discouraging-inflation">Jim Cramer Lists 6 Conditions For Market Selloff To End Amid &#39;Discouraging&#39; Inflation Data</a>
&ldquo;I wondered aloud if this could be worse than 2008. What interest rates are doing, exchange rates globally, central banks seem reactionary and in CYA mode. One of my analysts said it was spooky that today I would wonder that alpine. Anniversary,&rdquo; Burry said in a tweet that he deleted later.
Interestingly, the Dow witnessed more intense single-day drops until Sept. 30, 2022. During the pandemic year of 2020, the index witnessed single-day drops of over 7% three times in the month of March.
Why It&#39;s Important: Burry&rsquo;s skepticism came at a time when rising interest rates and persisting hawkishness among central bankers battered global assets. The hawkish stance adopted by the U.S. Fed, despite signs of inflation having peaked at the time, kept the markets extremely <a href="https://www.benzinga.com/money/most-volatile-stocks/">volatile</a>. Experts like ARK Investment Management&rsquo;s Cathie Wood&nbsp;criticized the U.S. Fed&rsquo;s policy stating it is significantly more restrictive than in the 1980s.
The <a href="https://www.benzinga.com/money/vanguard-review/">Vanguard</a> Total Bond Market Index Fund ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/bnd#NASDAQ">BND</a>) and the iShares Core US Aggregate Bond ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/agg#NYSE">AGG</a>) lost over 4% in a one-month period leading up to Sept. 30, 2022. The SPDR S&amp;P 500 ETF Trust (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/spy#NYSE">SPY</a>), which tracks the S&amp;P 500, was down over 8% from the beginning of the year until Sept. 30, 2022.
This story was originally published on Sept. 30, 2022.
Read Next:&nbsp;<a href="https://www.benzinga.com/news/23/02/31000757/rob-reich-thinks-kitchen-tables-are-better-economic-indicators-than-stock-markets-gdp-in-america-its">Rob Reich Thinks Kitchen Tables Are Better Economic Indicators Than Stock Markets, GDP: &#39;In America, It&#39;s Expensive Just To Be Alive&#39;</a>

Short Ideas

Global

The Day 'Big Short' Investor Michael Burry Reminisced About Dow's Largest Single-Day Fall In 2008: Wondered 'If This Could Be Worse'

As the Federal Reserve hiked its policy rate by over four percentage points in 2022&nbsp;to tackle rising inflation, the U.S. Treasury market <a href="https://www.benzinga.com/news/23/01/30248114/dragged-by-inflation-treasuries-reportedly-register-biggest-annual-loss-in-2022">registered a record annual loss.</a>
The U.S. bond market index declined 12.5% during the year, the most in its history, reported Bloomberg. The worst months for the index were in September (-3.45%), March (-3.11%) and April (-3.10%).
Also Read: <a href="https://www.benzinga.com/money/how-to-invest-in-startups">How To Invest In Startups</a>
El-Erian&#39;s Take: Allianz chief economic adviser and noted economist Mohamed El-Erian believes there is more enthusiasm pertaining to bonds after their downbeat performance in 2022.
&ldquo;While analysts are unusually cautious about the prospects for stocks, there&rsquo;s more enthusiasm for bonds after their horrid 2022 performance due to the view that central banks are mostly done hiking. A more differentiated view of bonds is warranted as credit risk is far from done,&rdquo; El-Erian tweeted.
Benzinga&rsquo;s Take: After a horrible rout, markets often seem to have a tendency to deviate towards the mean reversion theory where they expect the asset class to post a better performance and pare some losses. However, as El-Erian noted, a differentiated view of the bond market is vital in current times given&nbsp;that the possibility of&nbsp;both recession and credit risk exist.
Price Action: Yields hit their highest in the October-November period following which they started declining as inflation began showing moderation and <a href="https://www.benzinga.com/analyst-ratings/analyst-color/23/01/30183415/proceed-with-caution-what-nouriel-roubini-larry-summers-and-mohamed-el-erian-say-ab">Federal Reserve officials slowed the pace of policy tightening</a>. The Vanguard Total Bond Market Index Fund ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/bnd#NASDAQ">BND</a>) and the iShares Core US Aggregate Bond ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/agg#NYSE">AGG</a>) lost over 14% in the last year.
Read Next: <a href="https://www.benzinga.com/news/23/01/30247928/paul-krugman-says-controlling-inflation-by-inducing-recession-is-like-stopping-the-action-on-the-fie">Paul Krugman Says Controlling Inflation By Inducing Recession Is Like &#39;Stopping The Action On The Field Until Everyone Sits Down&#39;</a>
<a href="https://www.flickr.com/photos/imfphoto/33371463163/in/photolist-SQVtmx-zLwMGN-TT2wht-TT2uwp-dgtWd4-dgu2TB-zLFjen-U21SxN-JqTcVW-KnosUx-dgu1Sp-dgtX99-dgtY2Q-dgu3CP-2nSHUQG-AGmBcd-apxFA9-dgu4tM-apuYVM-AFgFad-dgu2xT-dgu1Ud-dgu2N5-apxFyw-zLF4N8-dgu51L-apxFME-AGmJzQ-dgtYAQ-dgu4dz-AHy2FZ-AGmNyS-AqX4MJ-apuYE2-AqXdNj-AGmLou-apxFSU-apxFW5-AFgT1N-apuYRp-apxFsU-apxFvq-zLxawj-apxFES-dgu3FC-apuYLM-apuYSR-dgtYc9-apxFPd-dgu43L" target="_blank">Photo</a>&nbsp;by IMF on Flickr

Top Economist El-Erian Thinks Bonds Warrant A 'More Differentiated' View As Credit Risk Is Far From Done

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Futures

폭발적인 <a href="https://www.benzinga.com/etfs" target="_blank" rel="noopener" data-google-interstitial="false">ETF들의 성장</a>이 금융 환경을 재편하고 있으며, 운용 자산이 현재 15조 달러의 이정표에 가까워지고 있다.
최근 분석에서 JP모건의 전략가 니콜라오스 파니기르초글로(Nikolaos Panigirtzoglou)는 이러한 엄청난 변화의 의미를 자세히 조사하면서 ETF가 투자자 행동, 유동성 패턴 및 심지어 시장 위험까지도 어떻게 재정의하고 있는지를 조명했다.
1. 소매 투자자 심리가 변동성을 주도 
파니기르초글로는 ETF의 지배력이 커짐에 따라 소매 투자자들이 시장 심리를 주도하는 데 더 큰 영향을 미치게 되었다고 지적한다. 기관 투자자들과 달리 소매 거래자들은 대개 짧은 시간적 시야를 가지고 있어, 심리가 변동할 때 시장 트렌드에 갑작스럽고 확대된 변화를 초래할 수 있다.
2. 더 긴 상승세와 더 급격한 조정 
이 분석가는 ETF가 모멘텀 중심의 시장을 조장하여 상승장이 지속되는 동안 장기간의 랠리를 촉진한다고 강조한다. 그러나 시장이 반전될 때, 능동적 관리 보호 장치가 결여되어 급격한 조정과 변동성이 증가할 수 있다.
3. 대형주로 자금이 집중 
대부분의 ETF가 시가총액 가중 방식으로 운영되기 때문에 대형주에 불균형적으로 자본이 집중된다. 파니기르초글로는 이 경향이 메가캡의 가치 평가를 부풀리고, 소형주의 자리를 축소시켜 자본 할당에 위험을 초래할 수 있다고 경고한다.
엔비디아, 애플 및 마이크로소프트와 같은 기업들은 현재 미국 주식 시장에서 각각 3조 달러 이상의 시가총액을 차지하고 있다.
4. 유동성이 장 마감에 집중 
ETF가 거래 세션 종료 무렵에 리밸런싱을 하면서 유동성이 이러한 시점에 집중되고 있다. 파니기르초글로는 S&amp;P 500 거래의 약 1/3이 이제 하루의 마지막 10분 동안 이루어져, 집중된 활동의 피드백 루프를 만든다고 지적한다.
5. 몇몇 ETF에 위험이 집중 
SPDR S&amp;P 500 ETF(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>)와 Invesco QQQ Trust, Series 1 ETF(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>)와 같은 대형 ETF의 등장은 시스템적 위험을 초래했다. 파니기르초글로는 이들의 규모와 중요성이 주식 선물과 경쟁하고 있어, 시장이 대규모 단일 상품 흐름에 취약해진다고 주장한다.
6. 알고리즘 트레이더가 성장 
특히 채권 ETF는 전자 및 알고리즘 거래를 강화했다고 파니기르초글로가 언급했다. 비은행 시장 조성자들이 이제 고수익, 저마진 거래를 활용하여 채권 시장의 유동성 제공을 지배하고 있다.
iShares Core U.S. Aggregate Bond ETF(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AGG#NYSE">AGG</a>)와 Vanguard Total Bond Market ETF(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BND#NYSE">BND</a>)와 같은 인기 있는 채권 ETF는 미국에서 거래되는 가장 크고 유동적인 채권 시장 ETF 중 일부이다.
7. 지수 변경이 큰 영향을 미친다 
파니기르초글로는 ETF 주도의 자금 흐름이 지수 리밸런싱의 영향을 확대했다고 강조한다. 주요 지수에 편입되는 주식은 비정상적으로 큰 상승을 경험하는 반면, 제외되는 주식은 기본적 가치가 정당화할 수 있는 것보다 급격한 하락을 겪는다.
8. 기업 거버넌스가 약화 
패시브 펀드가 지배적이 되면서 파니기르초글로는 기업 활동이 감소하고 있다고 본다. 능동적 매니저들은 거버넌스 변경을 추진할 유인이 있는 반면, 패시브 펀드는 그렇지 않아 감독이 약화될 수 있다.
9. 시장 효율성이 하락 
패시브 투자로의 전환은 차익 거래 기회를 줄여 파니기르초글로는 더 지속적인 가격 왜곡을 초래한다고 주장한다. 이는 능동적 매니저들을 다시 유인할 수 있지만, 그들의 알파 추출 능력은 약화되었다.
10. 패시브 투자 한계가 가까워질 수 있다 
파니기르초글로는 패시브 투자에 대한 자연스러운 한계가 있을 수 있다고 제안한다. 만약 시장 비효율성이 너무 커지면 능동적 관리자가 복귀하여 ETF에서 능동적으로 관리되는 펀드로 자본이 다시 유입될 수 있다.
ETF 혁명은 분명히 투자의 민주화를 가져왔지만, 파니기르초글로는 그 급속한 성장이 의도치 않은 결과를 초래한다고 경고한다.
집중된 유동성에서 시스템적 위험 증가에 이르기까지, 이 환경은 경계를 요구하는 방식으로 진화하고 있다.
ETF 자산이 15조 달러에 가까워짐에 따라, 패시브의 지배력이 정체될 것인지, 아니면 그 영향력이 이제 막 시작된 것인지에 대한 질문이 제기된다.

다음 읽기: 
<ul>
<li><a href="https://www.benzinga.com/24/11/42107863/us-futures-head-lower-as-nvidia-reports-slowdown-in-quarterly-revenue-growth-expert-says-market-weakness-is-perfectly-normal-but-late-november-is-still-possible">엔비디아 실적이 투자자들을 실망시키면서 미국 선물이 하락: 전문가가 시장 약세는 &#8216;완전히 정상적&#8217;이라고 말했지만 11월 하순 반등은 여전히 가능하다고 주장</a></li>
</ul>
이미지는 Midjourney를 통해 인공지능으로 생성되었습니다.
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안정성을 위해 채권 및 채권 ETF를 찾는 투자자들은 도널드 트럼프 대통령 당선인의 관세 접근 방식으로 인해 <a href="https://www.benzinga.com/topic/treasury-yields">수익률 상승 압박</a>을 가할 수 있으므로 변동성이 높아질 수 있다.
무슨 일이 (What Happened): 채권 수익률은 목요일 연방준비제도(연준)의 25베이시스포인트 금리 인하 이후 계속 상승하고 있다. 10년 만기 국채 수익률은 트럼프의 재정 정책에 대한 시장의 추측에 따라 4.34%로 상승했다.
이러한 변화는 연준이 차입 비용을 낮추려는 노력을 복잡하게 만들며, 개별 채권 보유자들과 채권 ETF 투자자들에게 우려를 불러일으킨다. 세금 인하와 예상되는 관세의 배경은 연방준비제의 <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/11/41814589/why-trumps-boost-to-treasury-yields-inflation-expectations-may-weaken-feds-efforts-">금리 인하 능력을 제한</a>할 수 있다.
또한 읽어보세요: <a href="https://www.benzinga.com/24/11/41886697/two-ideas-famed-stock-market-forecasters-agree-on-for-2025">트럼프의 승리가 두 명의 시장 전문가를 소형주 및 금융주에 베팅하게 만든 이유</a>
9월 중순 이후로 국채 수익률은 70베이시스포인트 이상 급등하여 채권 가격에 추가 압박을 가하고 주요 채권 ETF에 영향을 미쳤다. BofA 글로벌 리서치는 국채 수익률 전망을 4.25%-4.75% 범위로 조정했다고 로이터가 보도했다. 이러한 상승하는 수익률 환경은 채권에 도전 과제를 제기한다. 높은 수익률은 채권 가격의 하락과 연결되며, 이는 채권 ETF 투자자들의 수익을 잠식할 수 있다.
왜 중요한가 (Why It Matters): 로이터에 따르면, 책임 있는 연방 예산 위원회는 트럼프의 제안된 재정 정책이 향후 10년간 국가 부채에 약 7.75조 달러를 추가할 것이라고 추정한다. 경제학자들, 은행들 및 분석가들은 이 <a href="https://www.benzinga.com/personal-finance/24/09/40961812/economists-warn-trumps-plans-for-tax-cuts-tariffs-and-deportation-could-trigger-skyrocketing-inf">계획이 인플레이션을 악화시키고 부채를 지속 불가능하게 만들 것</a>이라고 경고했다.
다양한 채권 시장 세그먼트에 대한 노출을 제공하는 채권 ETF는 채권 수익률이 상승함에 따라 이러한 재정적 압박의 영향을 받을 가능성이 높다.
수익률 상승은 채권 ETF 투자자에게 더 매력적인 소득을 제공할 수 있지만, 수익률이 계속 상승함에 따라 가격 하락과 관련된 위험이 커질 수도 있다.
월요일에는 10개의 주요 채권 ETF가 주로 하락 마감했다:
<ul>
<li>Vanguard Total Bond Market ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BND#NASDAQ">BND</a>): $72.95, 0.19% 하락.</li>
<li>iShares Core U.S. Aggregate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AGG#NYSE">AGG</a>): $98.28, 0.22% 하락.</li>
<li>SPDR Portfolio Aggregate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPAB#NYSE">SPAB</a>): $25.37, 0.2% 하락.</li>
<li>iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LQD#NYSE">LQD</a>): $109.64, 0.19% 하락.</li>
<li>Vanguard Short-Term Corporate Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/VCSH#NASDAQ">VCSH</a>): $78.31, 0.077% 하락.</li>
<li>iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>): $92.04, 0.49% 하락.</li>
<li>Vanguard Intermediate-Term Corporate Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/VCIT#NASDAQ">VCIT</a>): $81.49, 0.20% 하락.</li>
<li>iShares U.S. Treasury Bond ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/GOVT#BATS">GOVT</a>): $22.73, 0.20% 하락.</li>
<li>SPDR Bloomberg High Yield Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/JNK#NYSE">JNK</a>): $97.01, 0.06% 하락.</li>
<li>Vanguard Total International Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BNDX#NASDAQ">BNDX</a>): $49.93, 0.08% 상승.</li>
</ul>
트럼프 하의 채권 수익률 상승과 재정적 확장으로 인해 채권 ETF는 변동성을 계속해서 경험할 수 있다.
채권 투자자들은 높은 수익률의 매력을 채권 가격 하락의 잠재적 위험과 비교해야 할 필요가 있다. 특히 고수익과 장기 국채 세그먼트에서는 시장 변화가 가장 뚜렷할 것으로 예상된다.
다음 읽어볼 내용:
<ul>
<li><a href="https://kr.benzinga.com/news/usa/economy/%ED%8A%B8%EB%9F%BC%ED%94%84%EC%9D%98-%EC%84%B8%EA%B8%88-%EC%9D%B8%ED%95%98-%EA%B4%80%EC%84%B8-%EB%8F%99%EB%AC%BC%EC%A0%81-%EC%B6%A9%EB%8F%99%EC%9D%B4-sp-500-%EC%88%98%EC%9D%B5%EC%97%90/" target="_blank" rel="noopener">트럼프의 세금 인하, 관세, &#8216;동물적 충동&#8217;이 S&amp;P 500 실적에 미칠 영향</a></li>
</ul>
사진: Shutterstock
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8월 초의 변동성에 굴하지 않고 투자자들은 8월에 미국 상장지수펀드(ETF)에 750억 달러라는 엄청난 금액을 쏟아부었다. 이는 <a href="https://www.benzinga.com/etfs" target="_blank" rel="noopener" data-google-interstitial="false">작년 같은 기간</a>에 비해 5배 증가한 수치이다.
블룸버그 데이터에 따르면, 8월 ETF로의 강력한 유입으로 인해 연간 누계 총액이 6,000억 달러를 넘어섰고, 2024년은 2021년에 설정된 9,110억 달러의 유입이라는 사상 최고 기록에 잠재적으로 도전할 수 있는 궤도에 올랐다. 2021년은 연방준비제도(연준)가 금리 인상 주기를 시작하기 1년 전이다.
블룸버그 인텔리전스의 ETF 분석가인 아타나시오스 파로파기스(Athanasios Psarofagis)는 투자자들이 8월 초 시장 하락세를 활용하여 ETF 보유량을 늘렸다고 강조했다. 또한, 투자자들이 연준의 금리 인하 개시를 예상하면서 채권 관련 ETF와 소형주 ETF에 대한 수요가 눈에 띄게 급증했다.
<h3 class="wp-block-heading">ETF 시장, 총 가치 10조 달러에 근접</h3>
블룸버그 데이터에 따르면 ETF의 총 가치는 10조 달러에 근접하고 있으며, 이는 유통되는 모든 투자 펀드의 총 가치의 거의 3분의 1에 해당한다. 패시브 ETF는 8조 7천억 달러의 자산으로 이 분야를 장악하고 있으며, 액티브 관리형 ETF는 올해 30% 증가한 7,830억 달러를 기록했다.
채권과 주식 ETF 모두 강력한 자금 유입을 보였으며, 채권 상품은 올해 1,870억 달러, 주식 ETF는 3,670억 달러의 자금을 유치했다.
스트라테가스(Strategas)의 ETF 전략가인 토드 손(Todd Sohn)은 채권 ETF가 특히 적극적으로 관리되는 펀드를 포함한 다양한 새로운 상품의 혜택을 받았다고 말했다. 채권 ETF는 지난 3개월 동안 1,000억 달러를 유치해 2020년 팬데믹 회복 초기에 발생한 유입을 넘어섰다.
비트코인 기반 ETF 역시 올해 들어 순유입액이 170억 달러를 초과하는 등 인기를 끌었다. 단일 기업들을 기반으로 한 레버리지 및 인버스 펀드는 90억 달러 이상의 자산을 축적했다.
<h3 class="wp-block-heading">2024년 8월 유입 기준 상위 5개 ETF</h3>
다음은 2024년 8월에 가장 많은 자본 유입을 기록한 미국 상장 ETF이다:
<figure class="wp-block-table is-style-stripes">
<table style="overflow:auto; height: 90px; display: block;">
<thead>
<tr>
<th>펀드</th>
<th>2024년 8월 자금 유입</th>
</tr>
</thead>
<tbody>
<tr>
<td>Vanguard S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VOO#NYSE">VOO</a>)</td>
<td>59.64억 달러</td>
</tr>
<tr>
<td>Vanguard Information Tech ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VGT#NYSE">VGT</a>)</td>
<td>39.06억 달러</td>
</tr>
<tr>
<td>iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>)</td>
<td>30.38억 달러</td>
</tr>
<tr>
<td>iShares Core S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IVV#NYSE">IVV</a>)</td>
<td>24.90억 달러</td>
</tr>
<tr>
<td>Vanguard Total Stock Market ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VTI#NYSE">VTI</a>)</td>
<td>23.58억 달러</td>
</tr>
</tbody>
</table><figcaption class="wp-element-caption">데이터: TradingView (9월 3일 기준)</figcaption></figure>
<h3 class="wp-block-heading">연초부터 현재까지 ETF 유입 상위 5개</h3>
연초부터 현재까지 가장 많은 자금이 유입된 상위 5개 ETF는 다음과 같다:
<figure class="wp-block-table is-style-stripes">
<table style="overflow:auto; height: 90px; display: block;">
<thead>
<tr>
<th>펀드</th>
<th>연초 누적 자금 유입</th>
</tr>
</thead>
<tbody>
<tr>
<td>Vanguard S&amp;P 500 ETF</td>
<td>606.48억 달러</td>
</tr>
<tr>
<td>iShares Core S&amp;P 500 ETF</td>
<td>435.32억 달러</td>
</tr>
<tr>
<td>Vanguard Total Stock Market ETF</td>
<td>210.98억 달러</td>
</tr>
<tr>
<td>Invesco QQQ Trust, Series 1 (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>)</td>
<td>193.29억 달러</td>
</tr>
<tr>
<td>iShares Core U.S. Aggregate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AGG#NYSE">AGG</a>)</td>
<td>141.52억 달러</td>
</tr>
</tbody>
</table><figcaption class="wp-element-caption">데이터: TradingView (9월 3일 기준)</figcaption></figure>
사진 출처: Shutterstock.
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iShares Core U.S. Aggregate Bond ETF

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