Thus far, BulletShares have been taking aim on returns and the results are on point–for example, Invesco BulletShares 2018 HY Corp Bd ETF (NYSEArca: BSJI) is up 1.29 percent year-to-date and 2.82 percent the last three years. Invesco BulletShares 2018 Corp Bd ETF (NYSEArca: BSCI) is up 0.85 percent for the year and up 1.32 percent the last three years. This is just an inkling of the various ETF products they offer in the high-yield fixed income space.
If the economic data warrants more hawkishness in the Federal Reserve’s view when shaping monetary policy, then more inflows into higher-yielding investment vehicles could be the ongoing trend.
“With seven fed hikes in the books since 2015, short term rates have risen rapidly while the long end of the curve has lagged,” said Urbanowicz. “To put this in perspective, in 2018, six month rates have risen 38%, one year rates have risen 33%, three year rates have risen 32%, while 10 year rates have only come up 19%. Due to this flattening, investors have been favoring the short end of the curve to maximize their yield per unit of duration.”
For more trends in fixed income, visit the Fixed Income Channel.