In this month’s video, I look at key trends developing in global stock and bond markets. Chart review includes analysis of large-cap, small cap, emerging market, high yield, interest rates, and gold prices. Observations of risk and reward are noted throughout with an emphasis on caution for new money at this phase of the rally in stocks. Recorded on March 7, 2017.
Rising interest rates are making many bond fund investors nervous about the prospects for weakening future returns and unstable risk dynamics. This fear is putting some fuel behind ETF strategies that short Treasuries or sectors such as bank loans that have historically performed well in a rising rate environment.
The PowerShares Bank Loan Portfolio (BKLN), which invests in a basket of floating rate notes and senior loans, has accumulated more than $2.4 billion since the U.S. election. That confidence has so far been rewarded with a steadily rising price trend versus the volatility that has pervaded most aggregate bond benchmarks.
Vanguard ETFs have become a juggernaut in the world of passive investment management. They are widely used across retail, institutional, and retirement plans as an effective way to get low-cost, liquid, tax efficient, and dependable exposure to both stocks and bonds. You simply can’t go wrong when choosing one of their funds as a core or tactical holding within your ETF portfolio. Read more
The recent announcement by Fidelity Investments and Charles Schwab that they are lowering trading fees to $4.95 per transaction is a tremendous benefit to investors. The moves by both firms signal a continuation of the fee wars to lure additional assets on both the retail and institutional platforms. In many ways, this is an extension of the ongoing battle for lowest ETF expense ratio that has been raging for years now as well, with each firm trying to undercut the other. Read more
The strength of broad domestic stock market indices in 2017 has been the dominating story in global financial markets. The expectation of new government policies, coupled with the lack of risk asset volatility, has many investors feeling confident in a continuation of the bullish trend.
As of last week, ETFs trading in the United States have accumulated over $75 billion in fresh capital inflows since the start of the year. The majority of that money has gone towards stock-focused index funds such as the SPDR S&P 500 ETF (SPY).