Fixed-income investment strategies have been in vogue amidst all the market turmoil, especially through the use of exchange traded funds (ETFs). But now, with indications that the global economy may be safely on its way to recovery, some pundits are saying that fixed-income ETFs are no longer desirable. Is that true?
According to Dave Carpenter of the Associated Press, investors have been increasingly pouring cash into fixed-income ETFs. The added liquidity that ETFs bring to the fixed-income world remains a very appealing place for investors.
Many financial analysts think the fixed-income market has run its course and that “investors need to be in stocks for the long run in order to come out ahead of inflation.” [What You Should Know About Bond ETFs.]
Despite this sentiment, Morningstar ETF strategist Paul Justice thinks an investment strategy with a fixed-income ETF component can still be a good one. He says that a fixed-income strategy can provide liquidity for “money you can get ahold of when you need it.” [Podcast: If You Think Bond ETFs Are Boring, Think Again.]