Related: Highest Conviction Fixed Income Trade
2. iShares 1-3 Year Treasury Bond ETF (SHY)
The iShares 1-3 Year Treasury Bond ETF also seeks to track the investment results of an index composed of U.S. Treasury bonds with remaining maturities between one and three years but the big difference between SHV and SHY is is that SHY is a longer duration (1.94 years) with a bigger yield (2.15%) which means it’s slightly more risky. It has seen $492 million in flows over the course of the month which is 97% of the total flows YTD.
3. SPDR Blmbg Barclays 1-3 Mth T-Bill ETF (BIL)
The SPDR® Bloomberg Barclays 1-3 Month T-Bill ETF seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Bloomberg Barclays 1-3 Month U.S. Treasury Bill Index. It has seen $585.59 million in flows over the course of the month which is 42% of the total flows YTD.
Many Are Critical of Fed Interest Rate Hikes
According to Reuters, St. Louis Fed President James Bullard said in prepared remarks before a bankers association in Little Rock, Arkansas, “The U.S. Federal Reserve does not need to raise its benchmark interest rate much further given how close it is to the neutral rate. It is not necessary…to raise the policy rate further in order to put downward pressure on inflation, since inflation is already below target,” he added.
Bullard, who does not have a vote on the Fed’s interest rate policy this year is critical of the central bank’s plans to continue to raise rates.
Well it may or may not be necessary, investors can do their best to prepare for the changes by investing in ETFs that will reward them in this economy.
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