Looking at the treasury ETFs, over the last few days, there have been lots of sell-offs. That said, there are still inflows with the corporate bond ETFs.
During the latest episode of “ETF Edge,” Dave Nadig, CIO and Director of Research at ETF Trends, discusses the significant boost to gold and bond ETFs in the last month with host Bob Pisani, of CNBC.
As noted, the inflows extend to the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD), the iShares iBoxx $ High Yield Corporate Bond ETF (HYG), and the iShares Core U.S. Aggregate Bond ETF (AGG), among others. So there’s a lot of fondness for this area currently. As Nadig points out, the top ten at the close was made up almost exclusively of bond ETFs.
Putting A Bid Under The Market
He goes on to explain how some of this is a reaction to Fed buying, which is delayed data. However, funds such as LQD, HYG, JNK, and the Vanguard Short-Term Corporate Bond ETF (VCSH), are the funds being used by the Fed. It’s putting a bid under the entire market.
There’s much less to be seen in treasuries, to be sure, and that’s understandable. Still, as Nadig notes, “It is important to remember that investors don’t have much choice. Unless you’re literally going to take all your money and stick it in a mattress, you’re going to be looking for someplace to park that money.”
So, with this money coming in off of the ‘sidelines’ from March and April, it has to go somewhere. According to Nadig, it’s not a surprise to see that go towards these more safe-haven assets, or these yield hunting assets when talking about corporates and the high yield.
It’s even to the point of noting the billion-dollar week last week in GLD as well. This makes the case all the more clear that investors and advisors are seeing all of this money coming back to work.
Watch Dave Nadig Discuss The Bond Inflows:
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