Being Short Has Its ETF Benefits
After a record year for fixed income ETFs in 2024, demand has been even stronger to start 2025. U.S. listed fixed income ETFs pulled in $78 billion in the first two months.
Cash Is King: A Quick Look At 3 Cash ETFs
Federal Reserve rates remain elevated, so cash continues to offer competitive yields. Cash is not created equal, with different cash alternatives providing slightly different results to investors. Some are tax-advantaged too. A quick look at 3 different cash ETFs follows.
BIL: 2025 Expected Rates Cuts Slashed, Reassessing The Bond Market
The 10-year Treasury yield is nearing critical resistance levels, impacting the performance of the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) and iShares Core US Aggregate Bond ETF (AGG). I maintain a hold rating on BIL, seeing it as a viable cash alternative with yields likely to remain in the low-mid-4% range through year-end. BIL offers liquidity and low expense ratios, but investors should consider yield-to-maturity and potential tax benefits of alternatives like the Alpha Architect 1-3 Month Box ETF (BOXX).
BIL: With Interest Rates Declining, Consider Pairing Back Cash And T-Bills
T-bills have been outperforming due to Fed rate hikes but will likely underperform as rates decline, making them less attractive than most bonds. Investors overweight cash should consider pairing back their exposure. ETFs focusing on short-term, high-quality securities maintain some benefits of t-bills, and should outperform in the coming months and years.
Stashing Cash: BIL Has Competition Amid Fed Cuts (Rating Downgrade)
I have a hold rating on BIL due to balanced risks with richly priced US large-cap stocks and short-term Treasury bills yielding above 3.5%. BIL offers exposure to short-duration Treasury bills, providing a cash-like return with low volatility and essentially zero default risk. BOXX ETF is a viable alternative to BIL for those with significant cash holdings in taxable accounts, offering tax advantages and similar returns.
Breakeven Federal Reserve Cuts For Short-Term And Variable Rate ETFs
Federal Reserve cuts will lead to lower dividend yields on ultra short-term and variable rate investments. Most of these trade with healthy spreads to comparable fixed-rate bonds. Breakevens vary though, with some variable rate investments likely to offer above-average yields for years to come, others not so much.
Bonds Are So Hot Right Now. Here Are The 9%+ Payers To Buy
I recently wrote about a trend that's making income investors excited: After years of failing to produce decent returns, bonds are back.
New Gamma ETF Mixes Large-Cap & T-Bill Exposure
On Tuesday, Tidal Financial Group and Gamma Capital Partners debuted the GammaRoad Market Navigation ETF (GMMA). “As markets continue to experience bouts of market volatility, the launch of this product comes at the right time.
Time to Invest in Cash-Like ETFs?
Wall Street has been struggling to find a footing in recent weeks. In such a scenario, investors want to keep money aside, raising demand for cash-like ETFs.
5 Hot ETFs of Last Week
ETFs across various categories pulled in $4.4 billion in capital last week. U.S. fixed-income ETFs led the way with $3.4 billion in inflows, followed by inflows of $2.4 billion in leveraged ETFs.
BIL: Prepare For Distribution Cuts
BIL ETF provides exposure to short-term U.S. Treasury Bills with high yields and stable prices. Rebalancing in August and September will likely lead to lower yields due to expected Fed rate cuts. BIL's yield is likely to drop around 1% into 2025, but market expectations for further Fed cuts look overdone.
BIL: Still Shines And Is Worth Holding
Fed maintains interest rates at 525 to 550 basis points, only planning one rate cut in 2024. SPDR Bloomberg 1-3 Month T-Bill ETF offers stability, 5.34% yield, and low expense ratio, making it a worthwhile investment for 2024. Bond-based ETFs like BIL are sensitive to interest rate changes and do not benefit from rate cuts due to T-Bill's ultra-short maturity dates.
