Mon, Mar. 16, 2:56 PM
- Checking out sharp oil decline episodes in 1985, 1997-98, and 2008-09, Natixis' Patrick Artus sees a number of statistically robust consequences. Among them are a rise in real wages, corporate profits, and real interest rates.
- In those instances since the introduction of the euro, the oil fall has also resulted in a weaker euro (we can check that one off already).
- The bottom line, says Artus, is an optimistic view on the economy, especially the eurozone.
- ETFs: AGG, FXE, BND, BOND, EUO, ERO, SCHZ, DRR, EUFX, LAG, ULE, URR, SAGG, GBF, FBND, IUSB, VBND
Wed, Mar. 11, 9:46 AM
- "The Fed is intent on being a blockhead," says Jeff Gundlach, arguing the U.S. central bank is about to make the same mistake the ECB did in 2011 when it hiked interest rates. The ECB found itself quickly reversing course as the higher rates helped precipitate a blow-up in the euro-periphery.
- "Don't do it," he warns those who are thinking about going contrarian and shorting the dollar (UUP, UDN). Currency trends, he says, tend to go on and on. "The dollar, which has been a world leader, is going to be a world leader."
- ETFs: AGG, UUP, BND, BOND, UDN, SCHZ, UUPT, FORX, UDNT, LAG, USDU, SAGG, GBF, FBND, IUSB, VBND
Mon, Mar. 2, 1:43 PM
Tue, Feb. 24, 12:50 PM
- The SPDR DoubleLine Total Return Tactical ETF (NYSEARCA:TOTL) rolled out today by State Street (NYSE:STT) will invest in a broad portfolio of debt securities.
- As an active ETF the fund will be managed by veteran fixed income investor, Jeff Gundlach, his team at DoubleLine Capital and State Street Global Advisors.
- "DoubleLine obviously brings a history and proven track record of delivering superior risk-adjusted returns,” says James Ross, executive vice president and global head of SPDR ETFs at State Street Global Advisors.
- Other total market fixed income ETFs: AGG, BND, BOND, SCHZ, LAG, SAGG, GBF, RIGS, DI, FBND, LDUR, FWDB, IUSB, VBND
Sat, Feb. 21, 8:54 AM
- Is the ubiquitous Barclays U.S. Aggregate Bond Index (ETF version: AGG) due for an upgrade? Up to 90% of the Agg's risk is tied to changes in interest rates, figures BlackRock, with the other 10% linked to credit.
- The coming iShares Fixed Income Balanced Risk ETF (INC) will split the risk evenly between rates and credit - in other words, writes Chris Dieterich, it aims to be equally sensitive to the underlying economy as it is to interest rates. To accomplish this, the fund will own more corporate bonds, and alongside Treasurys, it will hold derivatives to hedge against them.
- Morningstar's Ben Johnson wouldn't mind an upgrade to the Agg, but figures more straightforward innovations could work best. One example is the iShares Core Total USD Bond Market ETF (NYSEARCA:IUSB), which launched last year. It's similar to the Barclays benchmark, but also includes high-yield paper and certain foreign bonds. "Does some better than the Agg have to be something that's complex ... It's a fine line between stupid and clever."
- ETFs: AGG, BND, BOND, SCHZ, LAG, SAGG, GBF, FBND, IUSB, VBND
Mon, Feb. 9, 5:08 PM
- January saw a record $17B of net outflows from stock ETPs, according to ETFGI, with fixed income and commodity funds seeing much of that money - inflows of $7.5B and $4.1B respectively.
- The moves came as the S&P 500 fell a big 4% for the month and bond prices shot higher.
- ETFs: AGG, BND, BOND, VV, SCHX, SCHZ, FEX, GTAA, AOK, JKD, AOM, AOR, EEH, LAG, RLY, EQL, EPRO, GAL, DBIZ, MATH, SAGG, IWL, GBF, FBND, GIVE, ERW, FWDD, IUSB, SYE, VBND, GAA, SBUS, ZLRG
Tue, Feb. 3, 12:35 PM
- Among those cut is the SPDR Barclays Capital Aggregate Bond (NYSEARCA:LAG), which now charges 0.1% per year, down from 0.21%, and making it more competitive with AGG and BND.
- SSgA's (NYSE:STT) ten international ETFs - a group including IPD, IPW, and IPK - now have annual fees of 0.4% vs. 0.5% previously. The emerging markets ETFs' - including EDIV and GML - new expense ratios are 0.49%, down from 0.50-0.59% previously.
- Some of the fee reductions are more dramatic: The SPDR 1500 Value Tilt ETF (NYSEARCA:VLU) and the SPDR S&P 1500 Momentum Tilt ETF (NYSEARCA:MMTM) are cut to 0.12% from 0.35%, and the SPDR Russell 2000 Low Volatility ETF (NYSEARCA:SMLV) is cut to 0.12% from 0.25%.
- Others with cuts: ITE, SST, TLO, ITR, LGLV, LWC, SCPB, IPE, MOYG, MOYV, SLY, SLYG, SLYV, SPYG, SPVV, JPP, JSC, MTK, GWX, IPF, IPN, PS, IPU, IRV, IRY, IST, BIK, EEMB, GAF, GMF, GML, GUR, IBND.
Mon, Feb. 2, 3:40 PM
Thu, Jan. 29, 3:24 PM
- Comparing the U.S. economy to the game of Monopoly, Bill Gross says capitalism depends on those with capital hoping they can earn a positive return, and that by holding rates too low for too long, the Fed has crushed that hope.
- The central bank, however, has begun to recognize the distortions it's created, and will begin hiking "the Monopoly board's interest rates" late this year, "hoping to avoid landing on the figurative Park Place and Boardwalk in the process."
- "Bonds, despite their ridiculous yields, will not be easily threatened with a new bear market."
- Investment Outlook
- ETFs: AGG, BND, BOND, SCHZ, LAG, SAGG, GBF, FBND, IUSB, VBND
Tue, Jan. 6, 12:30 PM
- "Beware the Ides of March, or the Ides of any month in 2015 for that matter," writes Bill Gross in his latest investment outlook. "When the year is done, there will be minus signs in front of returns for many asset classes."
- There comes a time, says Gross, when zero-based or even negative yields fail to generate decent economic growth. Yes, we can get rallies in bond prices and P/E ratios, but the effect on real growth diminishes or even reverses. Corporations take advantage by borrowing at low rates, but take the money and buy back stock, rather than invest in the real economy.
- What to buy? High-quality assets with stable cash flows: Treasurys and investment-grade corporates, as well as the common stock of companies with attractive dividends and diversified revenue streams.
- ETFs: AGG, BND, BOND, SCHZ, LAG, SAGG, DI, GBF, FBND, LDUR, FWDB, IUSB, VBND
Dec. 29, 2014, 1:58 PM
Dec. 18, 2014, 12:11 PM
- Oil price drops similar or greater in magnitude than what's recently been seen have occurred a number of times over the past 30 years, say new Pimco CIO Daniel Ivascyn along with Saumil Parikh. Some have coincided with major recessions and others with faster global growth. So what gives for 2015?
- The short answer: This drop in oil is supply-, not demand-driven, they conclude, and thus should foster faster economic growth than otherwise next year.
- As for inflation, expect negative headline prints in developed economies next year, but these should bounce back later in 2015 and into the following year.
- Investment themes: 1) The outlook for easier monetary policy (in all but the U.S.) has been priced in, making for limited upside for high-quality duration 2) TIPS are attractive as their prices have more than discounted the coming negative inflation prints 3) Globally, eurozone peripheral bonds are the pick 4) In the U.S. non-agency mortgages (see Ivascyn's PDI) are poised for outperformance, but agency paper is overvalued, particularly as the Fed's purchases have ended.
- Ivascyn also manages the Pimco Income Fund (MUTF:PONAX) and (formerly managed by Bill Gross) the Pimco Unconstrained Bond Fund (MUTF:PUBAX).
- ETFs: AGG, BND, BOND, SCHZ, LAG, SAGG, DI, GBF, FBND, LDUR, FWDB, IUSB, VBND, TIP, VTIP, SCHP, IPE, LTPZ, STPZ, TIPZ, STIP, TPS, TDTT, TIPX, TDTF, SIPE
Dec. 12, 2014, 1:04 PM
- "The Fed, as the central banker of the world, has to worry about financial conditions not just in the United States, but the world," Bill Gross tells Bloomberg. "They should be very cautious about any tightening implications."
- Gross' comments come as oil crashes, equities and high-yield turn shaky, and the EU debt crisis shows signs of refreshing, and ahead of the FOMC's two-day meeting next week at which many expect the "considerable time" language to be removed from the policy statement - suggesting a rate hike within maybe six months.
- ETFs: AGG, BND, BOND, SCHZ, LAG, SAGG, DI, GBF, YPRO, FBND, BYLD, LDUR, FWDB, IUSB, VBND
Dec. 1, 2014, 11:04 AM
- "Lowflation" - inflation running at below-target rates - will be the major theme for the next twelve months, says Morgan Stanley's Joachim Fels, presenting his bank's 2015 global outlook. "Markets no longer believe that central banks will be able to bring inflation back to target any time soon. The longer this lasts, the more self-fulfilling these prophecies become."
- For evidence, look no further than the U.S. 10-year Treasury yield plumbing new lows on a daily basis (2.17% at last check) despite better economic growth data and promises of rate hikes in mid-2015. Then there's Germany (0.69%), Italy (1.99%), Spain (1.83%), and the U.K. (1.89%).
- Taking a variant viewpoint to most in the business, Morgan Stanley sees no Fed rate hike in 2015. As for the ECB, the bank puts the chances of full-blown QE at 50%, up from 40% previously. Easier policy should also be coming from central banks in China, India, and South Korea.
- ETFs: AGG, BND, BOND, SHY, SCHZ, BIL, VGSH, LAG, PLW, SHV, GOVT, SCHO, SAGG, DTUS, DI, GBF, SST, DTUL, FBND, TUZ, LDUR, FWDB, IUSB, TAPR, VBND
Dec. 1, 2014, 10:57 AM
Nov. 24, 2014, 11:18 AM
- Potential bond buyers are set to spend a net $2.4T next year, but borrowers will issue just $2T, according to JPMorgan. It will be the fifth time in seven years demand has outpaced supply, including about a $500B gap this year.
- What's going on here? Central banks. "There's really not been much supply hitting the market," says Nomura's George Goncalves. The ECB is set to buy about $400B in bonds next year, and the BOJ will add at least $700B, says JPMorgan. The BOJ owns about 20% of outstanding JGBs, and that proportion could rise to 50% as soon as 2018, according to the top economist at Japan Macro Advisors.
- ETFs: AGG, BND, BOND, SCHZ, LAG, SAGG, GBF, RIGS, DI, FBND, LDUR, FWDB, IUSB, VBND
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