In light of an improving U.S. economy, the Federal Reserve is eyeing interest rate normalization, even as global central banks adhere to loose monetary policies to stimulate growth. Nevertheless, the fixed-income markets and bond exchange traded funds may find some support from safe-haven bets to hedge market risks.
In the context of this approaching divergent backdrop, bond market experts will review the fixed-income market on the the annual online ETF Trends Virtual Summit on February 8. Martin Kremenstein, Managing Director and Head of ETFs at Nuveen, Fran Rodilosso, Head of Fixed Income ETF Portfolio Management at VanEck, and Eric Ervin, President & CEO of Reality Shares, will provide insights into potential alternative fixed-income strategies for diversification and yield generation going forward.
With government bonds provident higher returns, some are looking back to Treasuries and other high-grade debt again as a hedge against further market turbulence.
Yields on benchmark 10-year Treasury notes have increased by more than a percentage point from last year’s low, but yields have remained little changed over the past month as investors digest President Donald Trump’s policies and likelihood that the new administration will bolster economic growth and inflation.
“Much of the Trump rally is already priced in; this way we can protect ourselves against any negative events,” Nicolò Carpaneda, investment director of the retail fixed-interest team at M&G Investments, told the Wall Street Journal.
More investors are beginning to look at bonds as shock absorbers to hedge market risks, which may help maintain a floor on the fixed-income markets.
“We can now expect that government bonds can offer some kind of insurance feature again,” Paul O’Connor, who heads up multiasset investments at Henderson Global Investors, told the WSJ.
Financial advisors who are interested in learning more about CFP/CIMA accredited panels on the online conference can register for the February 8, 2017 ETF Trends Virtual Summit.