AGG: Expect Steady Dividends, Minimal Capital Gains Despite Fed Funds Rate Cuts
Longer-term Treasury and corporate bond rates may have already seen most of their decline, even though Fed Funds rate cuts haven't started. AGG has gained from falling rates in the past year, but capital appreciation could be limited going forward. Monthly dividends also look set to peak in the next year after increasing since 2022.
A Summer To Remember
U.S. equity markets climbed to record-highs while benchmark interest rates rebounded from eight-month lows on a relatively quiet end-of-summer week as investors parsed a 'Goldilocks' slate of economic data. PCE data showed modest inflationary pressures in July - keeping the Fed on course for multiple rate cuts by year-end - while consumer spending and consumer confidence data topped estimates. Posting gains for a fourth week following a three-week skid in late July, the S&P 500 gained another 0.3% this week. The Dow Jones finished the week at all-time record-highs.
AGG: The Window For Buying Bonds Is Narrowing (Rating Update)
AGG is diversified and has quality-rated debt, making it a good hedge for equities which are near record highs. Treasuries are offering positive real returns due to inflation's decline, which is in stark contrast to the last couple of years. This ETF is solely focused on US debt, which is offering higher yields than comparable Euro-denominated debt. This suggests relative value.
DoubleLine on Recession, Current Positioning, and U.S. Debt
Are we going to have a recession? Are we already in a recession?
Chasing Goldilocks
U.S. equity markets rallied while benchmark interest rates remained near the lows of the year after a critical slate of inflation data showed further encouraging signs of cooling price pressures. The Consumer Price Index posted a downside surprise for a fourth straight month, underscored by a "2-Handle" on Headline CPI, which follows a period of historically high inflation from 2021 to 2023. Sparking a renewed "Goldilocks" narrative, Retail Sales data was notably stronger than expected in July - posting its strongest monthly increase in 18 months - while Jobless Claims also moderated.
These 3 Index ETFs Are a Retiree's Best Friend
The Vanguard High Dividend Yield ETF provides a reasonable balance of income and potential for capital appreciation plus a little dividend growth. The iShares Core U.S. Aggregate Bond ETF doesn't offer capital gains, but it delivers strong, reliable income and plenty of safety.
High Yield Bond ETFs Have New Asset Leader
The U.S. high yield bond ETF category has a new asset leader. The iShares Broad USD High Yield Corporate Bond ETF (USHY) is now the largest high yield bond ETF in the market, with assets totaling $15.9 billion as of Aug.15.
The Return Of Volatility
In a highly volatile week across global financial markets, U.S. equity markets ultimately finished the week little-changed, while benchmark interest rates rebounded from the lowest levels of the year. Following a historic surge in volatility, stabilization in Asian and European markets, decent jobless claims data, and clarity on the domestic Presidential matchup helped to ease market jitters. Narrowly avoiding a fourth-straight week of losses, the S&P 500 finished flat - staging a late-week rebound after sharp declines early in the week. The Nasdaq remained in "correction territory."
Get Bond Appreciation While Still Extracting Yield
The anticipation of interest rate cuts have been spurring investors to add bonds before yields subsequently fall. Even so, they can still extract yield while adding core bond exposure with the NEOS Enhanced Income Aggregate Bond ETF (BNDI).
5 Most Loved ETFs of Last Week Amid Market Turmoil
ETFs across various categories pulled in $16.1 billion in capital last week, with U.S. equity ETFs leading the way with $9 billion in inflows.
Got $7,000 To Invest: Are AGG, BOND, or VOO ETFs A Buy?
24/7 Wall Street Insights Exchange Traded Funds offer a stock market type platform to invest in various indexes AGG and BOND are ETF examples of index market platforms for the US investment grade and broader global range investment grade bond markets, respectively.
Fixed Income ETFs Support Range of Advisor Objectives
In the first half of 2024, fixed income ETFs represented 29% of the U.S. industry's flows. This is encouraging as the asset category represents just 18% of the asset base.
