For instance, the iShares 1-3 Year Treasury Bond ETF (NYSEArca: SHY) has dipped 0.2% since the Fed minutes were revealed last week, whereas TLT has gained 0.7%. [Short-term Treasury ETFs Could Weaken as Fed Withdraws Support]
“Investing in fixed income today is almost the exact opposite of what it was last year,” Rick Rieder, chief investment officer of megamoney manager BlackRock’s Fundamental Fixed Income group and co-head of Americas Fixed Income, said in a CNBC article.
Reider points to longer-dated bonds and potential danger in the so-called belly of the curve around the three- to seven-year duration.
“The distortion last year was in the long end of the curve,” Reider added. “The distortion today is in the front end of the curve.”
For more information on the fixed-income market, visit our bond ETFs category.