Now that the Federal Reserve has stated it will hold rates for the time being, fixed-income exchange traded fund investors are eschewing conservative bets in favor of longer durations and more attractive yields.
ETF Trends’ Tom Lydon recently sat down with Matthew Tucker, CFA, Managing Director at BlackRock, to discuss the current fixed-income environment.
Last year, bond investors were spooked by the Federal Reserve’s tapering stance, but now that the Fed has assured markets that it will keep benchmark rates low, investors are more comfortable moving back out on the yield curve.
“Some investors have gotten more comfortable going out the curve, buying duration, buying intermediate and even longer duration funds, ” Tucker said.
With ETFs, fixed-income investors have a lot of options at their finger tips. For instance, those who are wary of rate risk can seek out short-duration bond funds. Additionally, ETF traders can now diversify away from U.S. assets with international and emerging market debt.
For more information on iShares bond funds, investors can visit BlackRock’s iShares.
Watch the video below to see the full interview with Matt Tucker.
To view past video interviews, visit our video section.