Cash Is King: 5 Bond ETFs Unlocking Attractive Returns In A 5% Rate World
Portfolio Pulse from Piero Cingari
The Fed funds rate is at 5.5%, its highest level since the early 2000s, prompting investors to reconsider riskier assets such as stocks. The resilience of the U.S. economy has led to a spike in U.S. Treasury yields, with the 2-year yield recently breaking the 5% barrier. This has resulted in a surge of investments into short-term bond ETFs, with $7 billion flowing into ultra-short bond ETFs in August. Five short-term Bond ETFs that have attracted substantial investments are iShares 0-3 Month Treasury Bond ETF (SGOV), Goldman Sachs Access Treasury 0-1 Year ETF (GBIL), SPDR Portfolio Short Term Treasury ETF (SPTS), iShares 1-3 Year Treasury Bond ETF (SHY), and iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB).

September 07, 2023 | 4:45 pm
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POSITIVE IMPACT
Goldman Sachs Access Treasury 0-1 Year ETF (GBIL) has attracted substantial investments due to the high Fed funds rate.
The high Fed funds rate has made cash-like investments more appealing, leading to a surge in investments into short-term bond ETFs like GBIL.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB) has seen a significant inflow of investments due to the high Fed funds rate.
The high Fed funds rate has made cash-like investments more appealing, leading to a surge in investments into short-term bond ETFs like IGSB.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
iShares 0-3 Month Treasury Bond ETF (SGOV) has seen a significant inflow of investments due to the high Fed funds rate.
The high Fed funds rate has made cash-like investments more appealing, leading to a surge in investments into short-term bond ETFs like SGOV.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
iShares 1-3 Year Treasury Bond ETF (SHY) has attracted substantial investments due to the high Fed funds rate.
The high Fed funds rate has made cash-like investments more appealing, leading to a surge in investments into short-term bond ETFs like SHY.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
SPDR Portfolio Short Term Treasury ETF (SPTS) has seen a significant inflow of investments due to the high Fed funds rate.
The high Fed funds rate has made cash-like investments more appealing, leading to a surge in investments into short-term bond ETFs like SPTS.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100