The Fed’s shift into a tighter monetary policy should have pushed up benchmark Treasury yields and put pressure on bond prices. However, 10-year Treasury yields are down to 2.67%, a 2-month low, as emerging market turmoil shocked the equities market.
In the corporate space, the iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSEArca: LQD) is up 1.6% year-to-date, while speculative grade debt ETFs, the iShares iBoxx $ High Yield Corporate Bond ETF (NYSEArca: HYG) and the SPDR Barclays High Yield Bond ETF (NYSEArca: JNK), are up 0.4% and 0.6%, respectively. [Time to Jump for Junk]
Surprisingly, emerging market debt is holding up, with iShares J.P. Morgan USD Emerging Markets Bond ETF (NYSEArca: EMB) up 0.6% so far this year, despite the decline in emerging equities. [Appetite for Emerging Markets Corporates Still Robust]
For more information on bonds, visit our bond ETFs category.
Max Chen contributed to this article.
For full disclosure, Tom Lydon’s clients own shares of TLT, HYG, JNK and LQD.