In Treasuries, the jump in yields has triggered a rally in inverse ETFs that short bonds. Some institutional investors have been positioning for higher yields with these bearish funds. [Shorting Treasury Bonds with ETFs]
Some have been anticipating movement into corporate bonds, but LQD “peaked in early March” and suffered one of its worst days in months on Wednesday, according to CNBC.com’s Trader Talk blog. “This is not that surprising–investment grade bonds usually trade at a spread to Treasuries.” [Rising Yields Punish Treasury ETFs]
iShares iBoxx InvesTop Investment Grade Corporate Bond Fund
Full disclosure: Tom Lydon’s clients own LQD.
