This recovery is proceeding a little differently than those past. Exchange traded fund (ETF) investors showing an increased appetite for risk, but interestingly, they’re backing themselves up by grabbing safe-haven funds, too.
As the economic recovery unfolds, it’s becoming clear that some things are different this time. Sure, the cyclical sectors such as industrials and consumer discretionary are attracting interest. But investors are still showing some concerns about the markets by pouring into Treasury Inflation-Protected Securities (TIPS) and taxable bond funds to preserve their capital. In fact, assets in the PIMCO 1-5 Year U.S. TIPS Index Fund (NYSEArca: STPZ) have surged from $177 million in January to $439 million as of March 30. [Bond ETF Alternatives as Rates Rise.]
Donna Mitchell for Financial Planning reports that as broader markets are rebounding, more defensive sectors, such as utilities, have lagged. That may not be for long, though; bond yields are paltry and have investors hunting for yield in other places. The utility sector happens to be the highest-yielding category in the S&P 500. [What Utility ETFs Can Do for You.]
For more stories about bond ETFs, visit our bond ETF category.
- Vanguard Utilities (NYSEArca: VPU)
- iShares Dow Jones U.S. Utilities (NYSEArca: IDU)
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.