Ahead of next month’s Fed meeting, market participants could rotate into lower duration fare, such as SHY as well as corporate bond funds where the holdings have average maturities of five years and less. Lower duration bonds are usually less vulnerable to rising rates.
For the week ended Nov. 3, TLT lost $785.1 million, a total surpassed by just one other ETF. TLT still has year-to-date inflows of $2.22 billion.
Moreover, U.S. fixed-income market may find further support from overseas demand, especially with international bonds offering paltry yields. For example, the Eurozone, Japan and Switzerland, among others, have employed negative interest rates.
For more information on the fixed-income market, visit our bond ETFs category.