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US Treasury bond yields are on an uncontrollable ascent, impacting global markets. The 10-year Treasury yield, a crucial barometer for monitoring the cost of money in global markets, surged above 4.75% on Tuesday, Oct. 3, reaching its highest level since August 2007.

10-Year Treasury Yields At 16-Year Highs Shake Markets: How Far Can They Climb?

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The Fed maintaining higher interest rates sparked an unprecedented surge in Treasury yields, impacting borrowing costs and raising concerns about economic growth.

US 10-Year, 30-Year Yields Hit Decade Highs, Shaking 5 Treasury ETFs

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We performed a screening of medium-cap ETFs - defined as having Assets Under Management (AUM) between $2 billion and $10 billion - to determine what funds had the largest change in net assets on the week, according to data from etfdb.com. Only non-leveraged funds were considered.
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iShares Treasury Floating Rate Bond ETF (NYSEARCA: TFLO)


ETF Winners And Losers: Medium-Cap Fund Flows - iShares&#39; TFLO Adds Over $3 Billion, TLH Loses $624.5 Million

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<p>The yields on U.S. Treasury bonds appear to be undergoing weeks of uncontrollable ascent, causing ripple <a href="https://www.benzinga.com/markets">effects in financial markets.</a></p>
<p>The 10-year Treasury yield, a crucial barometer for monitoring the cost of money in global markets, surged above 4.75% on Tuesday, Oct. 3, reaching its highest level since August 2007.</p>
<p>The increase in yields is inversely proportional to bond prices, resulting in the value of Treasuries plummeting to levels not seen in more than 15 years.</p>
<p>The <strong>US Treasury 10 Year Note ETF</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UTEN#NYSE">UTEN</a>) registered five consecutive months of losses, declining by over 10% since reaching its peak in March 2023. The <strong>iShares 10-20 Year Treasury Bond ETF</strong> (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLH#NASDAQ">TLH</a>) is trading at the lowest since July 2007. </p>
<p>Longer-dated Treasuries, as tracked by the <strong>iShares 20+ Year Treasury Bond ETF</strong> (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>), have lost more than half of their value since the onset of the pandemic in March 2020, hitting levels last <a href="https://www.benzinga.com/markets/bonds/23/10/35042773/bond-carnage-long-term-treasury-etf-tumbles-to-lowest-point-in-16-years">seen in August 2007. </a></p>
<h2 class="wp-block-heading">Chart: 10-Year Treasury Yields Vs. TLH ETF </h2>
<p><figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="500" src="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/10/03114456/US10Y_2023-10-03_16-44-40_4fba0-1024x500.png" alt="" class="wp-image-117073" srcset="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/10/03114456/US10Y_2023-10-03_16-44-40_4fba0-1024x500.png 1024w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/10/03114456/US10Y_2023-10-03_16-44-40_4fba0-300x146.png 300w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/10/03114456/US10Y_2023-10-03_16-44-40_4fba0-768x375.png 768w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/10/03114456/US10Y_2023-10-03_16-44-40_4fba0-1536x750.png 1536w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/10/03114456/US10Y_2023-10-03_16-44-40_4fba0.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure></p>
<h2 class="wp-block-heading">Rising Treasury Yields Cause Ripples In Global Markets</h2>
<p>The implications of rising Treasury yields are far-reaching, casting shadows on everything from stocks to gold. Investors are grappling with trepidation as they witness the fragility of assets exposed to risk and interest rates. </p>
<p>The S&amp;P 500 Index, as tracked by the <strong>SPDR S&amp;P 500 ETF Trust</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), a barometer of the stock market&#8217;s health, just limped through its roughest month of the year, setting a gloomy stage for October.</p>
<p>Gold, typically a safe haven in times of turmoil, was also feeling the heat. Its value is withering in the face of rising Treasury rates, a testament to the waning appeal of the yellow metal in times of heightened interest rates.</p>
<h2 class="wp-block-heading">The Roots Behind Higher Treasury Yields</h2>
<p>But why are U.S. Treasury yields rising this much? </p>
<p>Several factors are contributing to the rise in Treasury yields, including an expansion of the U.S. government&#8217;s budget deficit, the ongoing Fed quantitative tightening program and the Federal Reserve&#8217;s restrictive stance on interest rates. </p>
<h2 class="wp-block-heading">Rising Budget Deficit Exert Upward Pressure On Yields</h2>
<p>According to the Bipartisan Policy Center&#8217;s deficit tracker, the U.S. government has run up a cumulative deficit of $1.5 trillion through August, a staggering $641 billion more than the same period last year. The Congressional Budget Office (CBO) foresees deficits ballooning to $2.0 trillion this fiscal year, doubling the previous year&#8217;s figure.</p>
<p>This growing deficit means the U.S. government must issue more bonds to fund its spending spree. A surplus of bonds flooding the market naturally translates into higher yields, as investors demand more compensation for their capital.</p>
<p><strong>Fitch Ratings made a bold move on Aug. 1 when it downgraded U.S. debt from the coveted AAA status to AA+,</strong> citing rising deficits, a budgeting process marred by flaws and the ever-looming specter of political brinksmanship.</p>
<h2 class="wp-block-heading">Fed&#8217;s Tightening Efforts Add Fuel To The Fire</h2>
<p>Another cog in this complex machinery is the <strong>Federal Reserve</strong>. The central bank is running its quantitative tightening program, effectively trimming its balance sheet by offloading assets, including Treasury securities. As of Sept. 26, 2023, the Fed&#8217;s balance sheet had shrunk to $8 trillion, marking a reduction of $700 billion since March and nearly $1 trillion since the peak in April 2022.</p>
<p>Furthermore, the Fed is giving off signals it&#8217;s keen to keep interest rates elevated to coax inflation back to its 2% target. </p>
<p>At the September FOMC meeting, the Fed not only kept the door open for another rate hike this year but also scaled back its expectations for rate cuts in 2024, now hinting at only 50 basis points of reductions.</p>
<h2 class="wp-block-heading">Chart: Fed&#8217;s Balance Sheet Is Shrinking </h2>
<p><figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="500" src="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/10/03114913/RESPPANWW_2023-10-03_16-48-43_aecc8-1024x500.png" alt="" class="wp-image-117074" srcset="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/10/03114913/RESPPANWW_2023-10-03_16-48-43_aecc8-1024x500.png 1024w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/10/03114913/RESPPANWW_2023-10-03_16-48-43_aecc8-300x146.png 300w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/10/03114913/RESPPANWW_2023-10-03_16-48-43_aecc8-768x375.png 768w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/10/03114913/RESPPANWW_2023-10-03_16-48-43_aecc8-1536x750.png 1536w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/10/03114913/RESPPANWW_2023-10-03_16-48-43_aecc8.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure></p>
<h2 class="wp-block-heading">How High Can 10-Year Treasury Yields Surge?</h2>
<p>Ten-year Treasury yields have been rising for five consecutive months now. If October witnesses another surge in yields, it will mark the longest monthly streak of increases since 1999.</p>
<p>With yields currently hovering around 4.75% to 4.80%, the next immediate resistance level is the psychological 5% mark, which was previously reached in July 2007.</p>
<p>Above that level, there are the highs from June 2007 at 5.28%, and then the high from April 2002 at 5.42%.</p>
<p>It&#8217;s worth noting that from a historical perspective, 10-year yields above 5% are not uncommon. For much of the latter half of the past century, Treasury yields frequently danced above that threshold, reaching an all-time high of a jaw-dropping 15.82% in October 1981.</p>
<h2 class="wp-block-heading">Monthly Chart Of US 10-Year Treasury Yields </h2>
<p><figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="500" src="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/10/03115357/US10Y_2023-10-03_16-53-24_82a7a-1024x500.png" alt="" class="wp-image-117075" srcset="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/10/03115357/US10Y_2023-10-03_16-53-24_82a7a-1024x500.png 1024w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/10/03115357/US10Y_2023-10-03_16-53-24_82a7a-300x146.png 300w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/10/03115357/US10Y_2023-10-03_16-53-24_82a7a-768x375.png 768w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/10/03115357/US10Y_2023-10-03_16-53-24_82a7a-1536x750.png 1536w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/10/03115357/US10Y_2023-10-03_16-53-24_82a7a.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure></p>
<p><em>Read Now:</em> <em><a href="https://www.benzinga.com/analyst-ratings/analyst-color/23/10/35062922/higher-rates-lower-leverage-growth-stocks-to-struggle-while-ai-offers-hope-goldman-">Higher Rates, Lower Leverage: Growth Stocks To Struggle While AI Offers Hope, Goldman Sachs Analysts Say</a></em></p>
<p><em>Photo: Shutterstock</em></p>


<p>The Federal Reserve&#8217;s commitment to maintaining higher interest rates for longer has unleashed seismic tremors within the bond market, culminating in an explosive surge in yields across all maturity periods. Initially, the reverberations were absorbed by 2-year yields, a segment that had historically been swift to react to policy <a href="https://www.benzinga.com/federal-reserve">cues from Powell and the Fed. </a></p>
<p>But as investors adjust their interest rate projections, the intense surge in Treasury yields is now extending its reach to longer-term maturities.</p>
<p>At the latest FOMC meeting, the Fed left the rate unchanged in the 5.25%-5.50% range, but macroeconomic projections indicated a median preference for another rate hike in 2023, and trimmed the rate-cut scenario to only 50 basis point in 2024, down from a full percentage <a href="https://www.benzinga.com/economics/macro-economic-events/23/09/34772413/jerome-powell-signals-caution-economic-data-to-determine-if-more-interest-rate-hi">point in June&#8217;s projections. </a></p>
<h2 class="wp-block-heading">Chart: 10-Year And 30-Year Treasury Yields Soar To Over A Decade High</h2>
<p><figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="541" src="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/09/25115920/US10Y_2023-09-25_17-58-56_7bbca-1024x541.png" alt="" class="wp-image-112211" srcset="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/09/25115920/US10Y_2023-09-25_17-58-56_7bbca-1024x541.png 1024w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/09/25115920/US10Y_2023-09-25_17-58-56_7bbca-300x159.png 300w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/09/25115920/US10Y_2023-09-25_17-58-56_7bbca-768x406.png 768w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/09/25115920/US10Y_2023-09-25_17-58-56_7bbca-1536x812.png 1536w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/09/25115920/US10Y_2023-09-25_17-58-56_7bbca.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure></p>
<p>Monday witnessed an astonishing milestone as the yield on the benchmark 10-year Treasury bond rocketed to over 4.50%, a threshold not seen since October 2007.</p>
<p>Simultaneously, the yields on 30-year Treasury securities scaled to 4.62%, marking their highest level since February 2011.</p>
<p>These dramatic increases are primarily driven by rising real rates, directly influenced by the Fed&#8217;s policy stance.</p>
<p>The ramifications of this towering escalation in long-term Treasury yields are far-reaching as they directly influence a slew of real economy products, including auto loans, credit cards and mortgage rates. </p>
<p>As these yields ascend, the cost of borrowing for both consumers and businesses ascends in tandem, potentially triggering a deceleration in economic growth.</p>
<h2 class="wp-block-heading"><strong>Carnage Unleashed: Long-Term Treasury ETFs in Turmoil</strong></h2>
<p>Exchange-traded funds (ETFs) linked to long-term Treasuries are bearing the brunt of these yield surges. </p>
<p>The <strong>iShares 20+ Year Treasury Bond ETF</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NYSE">TLT</a>), the largest Treasury-related ETF with $38 billion in assets under management, experienced a 1.9% decline on Monday, reaching its lowest level in over a decade. This marks the ETF&#8217;s fifth consecutive week of losses, the worst losing streak in a year. </p>
<p>Similar declines have been observed in other longer-dated Treasury ETFs, including the <strong>SPDR Portfolio</strong> <strong>Long-Term Treasury ETF </strong>(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPTL#NYSE">SPTL</a>) and the <strong>Vanguard Long-Term Treasury ETF</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VGLT#NYSE">VGLT</a>), with the latter hitting its lowest level since inception.</p>
<p>The <strong>iShares 7-10 Year Treasury Bond ETF</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IEF#NYSE">IEF</a>) fell by 0.5% Monday, reaching levels last seen in April 2011. Since its peak in 2020, the ETF has experienced a 25% decline. </p>
<p>The <strong>iShares 10-20 Year Treasury Bond ETF</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TLH#NYSE">TLH</a>) was also strongly hit, down 1.6% on Monday and by a whopping 44% since March 2020. </p>
<p><em>Read Now: <a href="https://www.benzinga.com/economics/macro-economic-events/23/09/34772413/jerome-powell-signals-caution-economic-data-to-determine-if-more-interest-rate-hi">Morgan Stanley Strategist Advocates Defensive Stance As Market Dynamics Shift</a></em></p>
<p><em>Photo: Shutterstock</em></p>


<p>We performed a screening of medium-cap ETFs - defined as having Assets Under Management (AUM) between $2 billion and $10 billion - to determine what funds had the largest change in net assets on the week, according to data from etfdb.com. Only non-leveraged funds were considered.<br />
Winners<br />
iShares Treasury Floating Rate Bond ETF (NYSEARCA: TFLO)<br />
TFLO added $2.13 billion in net assets over the trailing week.<br />
The iShares Treasury Floating Rate Bond ETF offers exposure to U.S. floating rate Treasury bonds, whose interest payments adjust to reflect changes in interest rates.<br />
TFLO has $8.39 billion in AUM and an expense ratio of 0.15%.<br />
TFLO has added $4.02 billion in net assets YTD.<br />
Vanguard Long-Term Treasury ETF (NYSEARCA: VGLT)<br />
VGLT added $861.59 million in net assets over the trailing week.<br />
The Vanguard Long-Term Treasury ETF offers exposure to long term government bonds, focusing on Treasuries that mature in ten years or more.<br />
VGLT has $7.25 billion in AUM and an expense ratio of 0.04%.<br />
VGLT has added $3.20 billion in net assets YTD.<br />
Losers<br />
iShares 10-20 Year Treasury Bond ETF (NYSEARCA: TLH)<br />
TLH lost $624.5 million in net assets over the trailing week.<br />
The iShares 10-20 Year Treasury Bond ETF provides exposure to the longer end of the maturity spectrum, specifically between 10 and 20 years.<br />
TLH has $7.94 billion in AUM and an expense ratio of 0.15%.<br />
TLH has added $1.87 billion in net assets YTD.</p>
<p>iShares Semiconductor ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/soxx#NASDAQ">SOXX</a>)<br />
SOXX lost $233.30 million in net assets over the trailing week.<br />
iShares Semiconductor ETF provides exposure to US companies that design, manufacture, and distribute semiconductors. Semiconductors are a critical component of modern technology, from cell phones to supercomputers. In recent months, much has been made of specific semiconductor technologies that underpin the progress of AI development.<br />
SOXX has $8.90 billion in AUM and an expense ratio of 0.35%. The fund has holdings in 31 companies, with the 10 largest comprising 57.82% of the fund.<br />
The fund&rsquo;s largest holdings are NVIDIA Corporation (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/nvda#NASDAQ">NVDA</a>) and Broadcom Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/avgo#NASDAQ">AVGO</a>) making up 8.71% and 8.25% of the fund, respectively.<br />
SOXX has lost $9.10 million in net assets YTD.<br />
Featured photo by Dmitry Demidko on Unsplash</p>


ETF Winners And Losers: Medium-Cap Fund Flows - iShares' TFLO Adds Over $3 Billion, TLH Loses $624.5 Million

<p>A key measure of the Treasury yield curve, the gap between short and long-dated treasuries, reached a decade low. The gap between 10-year and two-year rates fell below 67 basis points, the lowest since November 2007.</p>
<p>
	<strong>Tax Reform Uncertainty and Bond Auction</strong></p>
<p>
	Uncertainty is mounting on the timely passing of the U.S. tax reform. After the Democrats emerging victorious in Virginia and New Jersey, House Speaker Paul Ryan stated that there is now an increased pressure on his party to pass the promised reforms. However, he indicated that if required, the tax reform will be delayed, owing to Congressional Budget Office&#39;s forecast cost of $1.7 trillion over a decade. Per Washington Post reports, Senate Republican leaders are weighing the impact of a one-year delay in reforms.</p>
<p>
	Markets believe that uncertainty over the tax reform has increased the appeal of curve-flattening trades. Moreover, increasing uncertainty over whether the government will introduce bonds having a maturity of more than 30 years also contributed to the growing appeal of such trades.</p>
<p>
	Treasury&#39;s auction of $23 billion of 10-year bonds saw high demand. Moreover, an auction of $15 billion of 30-year bonds is also due this week. Markets anticipate a rate hike in December, which is expected to keep the two-year yields intact and further flatten the curve.</p>
<p>
	<strong>Economic Scenario</strong></p>
<p>
	Changes in U.S. non-farm payrolls were positive as it reflected the largest gain since July 2016. Although 261,000 new positions were created in October compared with expectations of 310,000, the number still shows gradual improvement from hurricane-related headwinds. This is in sync with the market&#39;s expectation of an interest rate hike in December. Per the CME Fed Watch tool, markets price in a 96.7% chance of a rate hike in December.</p>
<p>
	Let us now discuss a few ETFs focused on providing exposure to U.S. Treasuries (see <a href="https://www.zacks.com/etf/etf_category_details.php?cat=Government-Bond-ETFs&amp;i=22">all Government Bond ETFs here</a>).</p>
<p>
	<strong>iShares 7-10 Year Treasury Bond ETF</strong> IEF</p>
<p>
	This fund seeks to provide exposure to intermediate term U.S. Treasury bonds.</p>
<p>
	With $7.5 billion in AUM, it charges a fee of 15 basis points a year. It has an effective duration of 7.51 years and a weighted average maturity of 8.27 years. The fund has returned 1.5% year to date but has lost 3.7% in a year (as of Nov 8, 2017). IEF has a Zacks ETF Rank #3 (Hold) with a High risk outlook.</p>
<p>
	<strong>iShares U.S. Treasury Bond ETF</strong> GOVT</p>
<p>
	This fund seeks to provide exposure to U.S. Treasury bonds in a wide-maturity spectrum.</p>
<p>
	It has AUM of $5.2 billion and charges a fee of 15 basis points a year. It has an effective duration of 6.06 years and a weighted average maturity of 7.60 years. The fund has returned 1.2% year to date but has lost 2.3% in a year (as of Nov 8, 2017). GOVT has a Zacks ETF Rank #3 with a Medium risk outlook.</p>
<p>
	<strong>Vanguard Intermediate-Term Government Bond ETF </strong>VGIT</p>
<p>
	This fund seeks to provide exposure to U.S. Treasury bonds in the five-10 years maturity spectrum.</p>
<p>
	It has AUM of $1.5 billion and charges a fee of 7 basis points a year. It has an average duration of 5.2 years and an average effective maturity of 5.5 years. The fund has returned 0.8% year to date but has lost 2.8% in a year (as of Nov 8, 2017). VGIT has a Zacks ETF Rank #3 with a Medium risk outlook.</p>
<p>
	<strong>iShares 10-20 Year Treasury Bond ETF</strong> TLH</p>
<p>
	This fund seeks to provide exposure to longer- term U.S. Treasury bonds in the 10-20 year maturity horizon.</p>
<p>
	It has AUM of $561.3 million and charges a fee of 15 basis points a year. It has an effective duration of 10.24 years and a weighted average maturity of 13.80 years. The fund has returned 3.0% year to date but has lost 3.4% in a year (as of Nov 8, 2017). TLH has a Zacks ETF Rank #3 with a High risk outlook.</p>
<p>
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GOVT

<p>Money managers who may be required to allocate a certain portion of cash in fixed income investments are faced with a simple problem: There are few opportunities where bond yields are attractive, let alone yielding a positive return.</p>
<p>According to a <a href="http://www.cnbc.com/2016/09/09/negative-yields-why-blackrock-and-others-are-buying-those-bonds.html">CNBC report,</a> large fund managers, such as BlackRock, aren't deterred. The firm's chief investment officer and co-head of global fixed income was quoted by CNBC as saying during a media roundtable event that the company does buy negative rate corporate bonds.</p>
<p>In other words, BlackRock is essentially entering a losing investment with full knowledge off the bat.</p>
<p><bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/09/8434302/another-catalyst-for-em-bond-etfs">Another Catalyst For EM Bond ETFs</a></bzrelatedlink></p>
<p>He explained that the "only reason" why anyone would buy a negative-rate bond is if "you think it's going to go more negative."</p>
<p>CNBC noted that as bond yields fall into further negative territory, their prices technically rise. As such, a money manager like BlackRock &mdash; in theory &mdash; could sell a negative-yielding bond for a profit.</p>
<p>And now the follow up question: Who would buy a bond that is yielding an even steeper negative rate? The answer: Central banks.</p>
<p>For instance, the European Central Bank has been buying government bonds since March 2015 and even expanded its purchases in June of this year to include corporate bonds.</p>
<p>By spending $90 billion a month, the ECB &mdash; as of last week &mdash; now holds $1 trillion worth of bonds. As such, fund managers looking to sell bonds for a profit "is almost guaranteed" to find a buyer.</p>
<p>Finally, CNBC stated that the median 10-year yield for investment-grade sovereign issuers was just 1.17 percent, down from 3.87 percent as of July 2011. </p>
<p><a href="https://pro.benzinga.com/?utm_source=Benzinga&amp;utm_medium=Benzinga%20Top%20of%20Article&amp;am%22%3">Full ratings data available on Benzinga Pro.</a></p>
<p><i>Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email <a href="mailto:feedback@benzinga.com">feedback@benzinga.com</a> with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!</i></p>


RLH Equity Partners Sells Portfolio Company, Cymetric, To Navigant, Terms Not Disclosed

<p>This morning, the benchmark 10-year US treasury yield hit an all-time low of 1.65% and investors are clamoring to understand what this low of a yield means for their portfolio. What is more interesting is the increasing divergence of credit and equity markets in this respect. As shown by the chart below, prior to the debt ceiling debate last summer, the 10-year yield and the S&amp;P 500 (on a normalized basis) largely tracked each other. Once the debt ceiling fiasco started, the 10-year yield nose-dived, as did stocks, but bond yields fell much further than did stocks. It appears as though the S&amp;P 500 is extremely rich relative to the 10-year using this logic. However, the 10-year could also be artificially too low due to Operation Twist flattening the curve. Thus, there are a few ways to play this:</p>
<p><img src="/files/images/2012/May/30/10_year_vs_spx.gif" width="736" height="527" alt="10_year_vs_spx.gif" /></p>
<p>First, if investors believe that the divergence of the two benchmarks will reverse and the spread will narrow, a good trade idea would be to short the SPY ETF (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>) and short the IEF (NYSE: <a class="ticker" href="/stock/ief#NYSE">IEF</a>) or TLH (NYSE: <a class="ticker" href="/stock/tlh#NYSE">TLH</a>) ETF's (iShares 7-10 year and 10-20 year respectively). Thus, investors profit as long as the spread narrows, regardless of rates rising or falling.</p>
<p>Second, the 10-year yield and the USD/JPY rate also tend to track each other really well due to interest rate differentials and other similar characteristics, so an investor betting on the 10-year yield to go higher could long the USD/JPY or short the FXY ETF (NYSE: <a class="ticker" href="/stock/fxy#NYSE">FXY</a>). Conversely, if investors see a further deterioration of credit conditions in Europe (markets start to seize as they did last summer/fall), the 10-year yield would probably fall further, so one could short the dollar against the Yen.</p>
<p>Third, buy gold (NYSE: <a class="ticker" href="/stock/gld#NYSE">GLD</a>) on pull-backs, as a falling 10-year yield, and more importantly 10-year breakeven yield, signals disinflationary pressures in the near and medium terms. As disinflationary pressures mount, the Fed will be more likely to print. Thus, buying gold on pullbacks as a hedge to this potential of Fed action seems reasonable.</p>
<p>Last, BE TACTICAL. It is increasingly difficult to have a long-term or even medium-term view on the markets and the economy, as there are lots of unknowns and more importantly, the outcomes are largely controlled by politicians, which all but wipes out the probability of any swift and sweeping resolution. Investors who act more like traders and take advantage of large intraday swings may end up more profitable.</p>

<p>The following exchange traded funds ended the week in the neighborhood of their 52-week highs, though many of them have faced headwinds lately. The share price of each is more than 15% higher than at the beginning of the year as well.</p>

<p><strong>iPath US Treasury 10-year Bull ETN</strong> (NASDAQ: <a class="ticker" href="/stock/dtyl#NASDAQ">DTYL</a>) is up more than 43% year to date but has faced resistance at $66 per share since early November. The investment seeks to replicate the performance of the Barclays Capital 10Y U.S. Treasury Futures Targeted Exposure index, which is designed to increase in response to a decrease in 10-year Treasury note yields and to decrease in response to an increase in 10-year Treasury note yields.</p>

<p><strong>iPath US Treasury Long Bond Bull ETN</strong> (NYSE: <a class="ticker" href="/stock/dlbl#NYSE">DLBL</a>) is about 34% higher year to date but has pulled back nearly 5% from the 52-week high. The investment seeks to replicate the performance of the Barclays Capital Long Bond U.S. Treasury Futures Targeted Exposure index. The index is designed to increase in response to a decrease in long-dated Treasury bond yields and to decrease in response to an increase in long-dated Treasury bond yields.</p>

<p><strong>Vanguard Long-Term Government Bond Index ETF</strong> (NASDAQ: <a class="ticker" href="/stock/vglt#NASDAQ">VGLT</a>) is up more than 25% since the beginning of the year and also has pulled back nearly 5% from the 52-week high. The fund employs a passive management or indexing investment approach designed to track the performance of the Barclays Capital U.S. Long Government Float Adjusted Index, which includes fixed income securities issued by the U.S. Treasury and dollar-denominated foreign debt guaranteed by the U.S. government.</p>

<p><strong>ProShares Ultra Utilities</strong> (NYSE: <a class="ticker" href="/stock/upw#NYSE">UPW</a>) is up about 25% since the beginning of the year, after rebounding from a pullback in late November. The investment seeks daily investment results that correspond to twice (200%) the daily performance of the Dow Jones U.S. Utilities Index. Top holdings include Dominion Resources (NYSE: <a class="ticker" href="/stock/d#NYSE">D</a>), Southern Company (NYSE: <a class="ticker" href="/stock/so#NYSE">SO</a>) and Exelon (NYSE: <a class="ticker" href="/stock/exc#NYSE">EXC</a>).</p>

<p><strong>PIMCO 15+ Year US TIPS Index ETF</strong> (NYSE: <a class="ticker" href="/stock/ltpz#NYSE">LTPZ</a>) is almost 23% higher year to date after pulling back about 2% in the past week. The investment seeks to provide a total return that closely corresponds to the total return of the BofA Merrill Lynch 15+ Year U.S. Inflation-Linked Treasury Index, which is an unmanaged index comprised of Treasury Inflation Protected Securities with a maturity of at least 15 years.</p>

<p><strong>iPath US Treasury Flattener ETN</strong> (NYSE: <a class="ticker" href="/stock/flat#NYSE">FLAT</a>) is up more than 22% since the beginning of the year and like many others on this list has faced headwinds in recent weeks. The underlying index employs a strategy that seeks to capture returns that are potentially available from a “steepening” or “flattening,” as applicable, of the U.S. Treasury yield curve through a notional rolling investment in U.S. Treasury note futures contracts.</p>

<p><strong>UBS E-TRACS 2x Long Alerian MLP Infrastructure ETN</strong> (NYSE: <a class="ticker" href="/stock/mlpl#NYSE">MLPL</a>) is about 22% higher since the beginning of the year and within 2% of the 52-week high reached last spring. The investment seeks to replicate twice the monthly performance of the Alerian MLP Infrastructure index, which is a composite of 25 energy infrastructure Master Limited Partnerships.</p>

<p><strong>SPDR Nuveen Barclays Capital Build America Bond</strong> (NYSE: <a class="ticker" href="/stock/babs#NYSE">BABS</a>) is up more than 21% year to date but more than 4% below the 52-week high. The fund invests at least 80% of its total assets in the securities comprising the underlying index, which tracks the market for taxable municipal securities designated as “Qualified Bonds” under the Build America Bond program created under the American Recovery and Reinvestment Act of 2009.</p>

<p><strong>iShares Barclays 10-20 Year Treasury Bond</strong> (NYSE: TLH) is up almost 19% since the beginning of the year, despite being essentially flat over the past month. The fund generally invests at least 90% of its assets in the bonds of the underlying index, which measures the performance of public obligations of the U.S. Treasury with a remaining maturity of between 10 and 20 years and with capitalization of $250 million or more of outstanding face value.</p>

<p><strong>PowerShares Build America Bond</strong> (NYSE: <a class="ticker" href="/stock/bab#NYSE">BAB</a>) is up more than 18% higher year to date despite a recent pullback. The fund invests at least 80% of the total assets in taxable municipal securities eligible to participate in the Build America Bonds program created under the American Recovery and Reinvestment Act of 2009 or other legislation providing for the issuance of taxable municipal securities on which the issuer receives federal support of the interest paid.</p>

<h4><a href="http://wallstreetsectorselector.com/wp-content/uploads/2011/11/narrow-winding-road.png"><img class="aligncenter size-full wp-image-132254" title="Stock Market Twists and Turns Ahead" src="http://wallstreetsectorselector.com/wp-content/uploads/2011/11/narrow-winding-road.png" alt="Stock Market Twists and Turns Ahead (SPY, DIA, SLV, EWI)" width="289" height="288" /></a></h4>
<h4>U.S. stock markets face twists and turns ahead as news from Europe, earnings and seasonality dominate global action.</h4>
<p>Last week was exciting, if nothing else, as events in Europe continued to roil major U.S. stock  markets.  The S&amp;P 500 (NYSEARCA:SPY) dropped 2.5% while the Dow Jones Industrials (NYSEARCA:DIA) shed 2% in response to ongoing drama in Greece and Italy. (NYSEARCA:EWI)  This week promises more of the same.</p>
<h5>On My Wall Street Radar</h5>
<p><a href="http://wallstreetsectorselector.com/wp-content/uploads/2011/11/spx110511.png"><img class="aligncenter size-full wp-image-132255" title="S&amp;P 500 (<a class="ticker" href="/stock/spy#" />SPY</a>)" src="http://wallstreetsectorselector.com/wp-content/uploads/2011/11/spx110511.png" alt="S&amp;P 500 (<a class="ticker" href="/stock/spy#">SPY</a>)" width="604" height="504" /> chart courtesy of <a href="http://www.stockcharts.com">www.stockcharts.com</a></p>
<p>In the chart of the S&amp;P 500 (NYSEARCA:SPY) above you can see how we're now in a new trading range between 1220-1290, the 50 Day Moving Average is moving up and the index is still below the all  important 200 Day Moving Average.  The bulls need to reclaim the 200 Day Moving Average soon and also hold the lower end of support at the 50 Day Moving Average of 1195.  From a technical standpoint, this is still a bear market until further evidence to the upside is seen.</p>
<h5>The Economic View from 35,000 Feet</h5>
<p>Europe continues to dominate the news last week as Greek Prime Minister George Papandreou dropped a bomb with his announcement and quick retraction of a national referendum regarding the European bailout program.  On Friday he survived a no confidence vote but by Sunday it appeared that a new government is going to be formed and Papandreou is out.  This fast moving situation is rocking investors worldwide and Todd Harrison, CEO of <a href="http://www.minyanville.com" target="_blank">Minyanville.com</a> continues to offer some of the best insight regarding this unfolding drama. <a href="http://wallstreetsectorselector.com/2011/11/handicapping-a-global-market-meltdown/" target="_blank">(Handicapping A Global Market Meltdown)</a></p>
<p>Meanwhile, in Italy, (NYSEARCA:EWI) the 10 year bond reached a Euro era record as the embattled country deals with its own economic problems and demands from the International Monetary Fund.</p>
<p>The G20 summit meeting ended with no action as it appears that no one in the G20 wants to participate in the European bailout package (except maybe for the IMF) but President Obama said that they had “moved the ball forward.”</p>
<h5>So with a new government coming in Greece and the European zone slipping into recession, this fluid situation promises to be on the front burner for weeks to come.</h5>
<p>At home, things were more positive as earnings reports continued with more than 15% overall earnings growth rate and more than 70% of U.S. companies beating expectations.  This week we'll hear from bellweathers Cisco (NASDAQ: <a class="ticker" href="/stock/csco#NASDAQ">CSCO</a>) and Dow component (NYSEARCA:DIA) Disney (NYSE: <a class="ticker" href="/stock/dis#NYSE">DIS</a>) reporting on Wednesday and Thursday.</p>
<p>Weekly unemployment declined to 397,000 and retail sales grew +3.5% year over year the week ended October 29th and so the economy continues to muddle along in what iShares' Global Chief Investment Strategist Russ Koesterich calls <a href="http://isharesblog.com/blog/2011/11/04/welcome-to-the-great-idle/" target="_blank">Welcome to The Great Idle.</a></p>
<p>Overall unemployment stayed virtually flat, declining to 9.0% from 9.1% with private sector employment growing, government employment declining, and hours worked increasing.</p>
<p>On a seasonality basis we're in the “best six months of the year” and Jeffrey Hirsch of <a href="http://www.stocktradersalmanac.com" target="_blank">Stock Traders Almanac </a>sees a <a href="http://wallstreetsectorselector.com/2011/11/sp-500-slipping-into-new-narrow-range/" target="_blank">new, narrow trading range </a>but a positive end for the year as a down 2011 would be the first losing pre-election year since 1939.</p>
<p>Leading sectors for the week were<a href="http://us.ishares.com/product_info/fund/overview/SLV.htm?fundSearch=true&amp;qt=SLV" target="_blank"> iShares Silver Trust</a> (NYSEARCA:SLV) and iShares Barclays 10-20 Year Treasury Bond (<a class="ticker" href="/stock/tlh#">TLH</a>) while a big loser was embattled Italy (NYSEARCA:EWI) dropping 8.5% for the week.</p>
<p>Next week is light for economic news with September Consumer Credit on Monday, October NFIB Small Business Index on Tuesday, weekly jobs on Thursday and November Consumer Sentiment on Friday.</p>
<h5>Bottom Line For Stock Market and ETF Investors: Expect more turmoil ahead as Europe dominates the headlines.  Overall it appears that this market wants to go up as it usually likes to do going into the end of the year and seasonality and history favor a year end rally.  However, all bets are off if Europe implodes.</h5>
<p><strong><em><span style="text-decoration: underline;"><a href="http://wallstreetsectorselector.com/wall-street-sector-selector-review/" target="_blank">Go here for a Special Offer from Wall Street Sector Selector</a>!</span></em></strong></p>
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<p>Disclaimer:  Wall Street Sector Selector actively trades a wide range of exchange traded funds (ETFs) and positions can change at any time.</p>
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<div id='wikinvestWireDiv132253'>
</div>

<p> </p>
<div>
<div>
<h1></h1>
</div>
<p>High yield bond ETFs concentrate on lower quality corporate bonds, which are considered riskier than higher-quality or more established companies. Because of this higher level of risk, high-yield bonds, also known as junk bonds, offer higher yields to investors. US high yield bond ETFs invest at least 65% of capital in binds that are not rated or are rated by S&amp;P or Moody's at or below BB (considered speculative). Because of high returns and the potential for diversification across many markets, regions, and industries, high yield bonds are a major part of many investment strategies.</p>
<div> <span class="apple-style-span"><span style="font-size: 12pt; line-height: 115%; font-family: "Times New Roman","serif"; color: black;">We track <a href="http://www.myplaniq.com/LTISystem/advanced__markets.action">asset class movement</a> and you can see here the fixed income table which is updated weekly.</span></span></div>
<p></p>
<div>
<table border="0" cellspacing="10">
<tbody>
<tr>
<th align="left"><strong>Assets Class</strong></th>
<th><strong>Symbols</strong></th>
<th><strong>05/06<br /> Trend<br /> Score</strong></th>
<th><strong>04/29<br /> Trend<br /> Score</strong></th>
<th><strong>Direction</strong></th>
</tr>
<tr>
<td>International Inflation Protected</td>
<td>WIP</td>
<td>6.74%</td>
<td>9.22%</td>
<td>v</td>
</tr>
<tr>
<td>High Yield</td>
<td>JNK</td>
<td>5.54%</td>
<td>5.68%</td>
<td>v</td>
</tr>
<tr>
<td>International Treasury</td>
<td>BWX</td>
<td>5.1%</td>
<td>6.82%</td>
<td>v</td>
</tr>
<tr>
<td>Long Term Credit</td>
<td>LQD</td>
<td>3.48%</td>
<td>2.87%</td>
<td>^</td>
</tr>
<tr>
<td>Emerging Mkt Bonds</td>
<td>PCY</td>
<td>3.48%</td>
<td>2.21%</td>
<td>^</td>
</tr>
<tr>
<td>20+ Year Treasury</td>
<td>TLT</td>
<td>3.38%</td>
<td>1.63%</td>
<td>^</td>
</tr>
<tr>
<td>Inflation Protected</td>
<td>TIP</td>
<td>3.09%</td>
<td>3.27%</td>
<td>v</td>
</tr>
<tr>
<td>10-20Year Treasury</td>
<td>TLH</td>
<td>2.88%</td>
<td>1.73%</td>
<td>^</td>
</tr>
<tr>
<td>Intermediate Term Credit</td>
<td>CIU</td>
<td>2.43%</td>
<td>2.06%</td>
<td>^</td>
</tr>
<tr>
<td>Intermediate Treasury</td>
<td>IEF</td>
<td>2.39%</td>
<td>1.65%</td>
<td>^</td>
</tr>
<tr>
<td>US Total Bond</td>
<td>BND</td>
<td>2.1%</td>
<td>1.77%</td>
<td>^</td>
</tr>
<tr>
<td>MBS Bond</td>
<td>MBB</td>
<td>1.92%</td>
<td>1.83%</td>
<td>^</td>
</tr>
<tr>
<td>California Muni</td>
<td>CMF</td>
<td>1.74%</td>
<td>1.99%</td>
<td>v</td>
</tr>
<tr>
<td>National Muni</td>
<td>MUB</td>
<td>1.57%</td>
<td>1.24%</td>
<td>^</td>
</tr>
<tr>
<td>Short Term Credit</td>
<td>CSJ</td>
<td>1.0%</td>
<td>1.09%</td>
<td>v</td>
</tr>
<tr>
<td>New York Muni</td>
<td>NYF</td>
<td>0.64%</td>
<td>0.51%</td>
<td>^</td>
</tr>
<tr>
<td>Short Term Treasury</td>
<td>SHY</td>
<td>0.55%</td>
<td>0.53%</td>
<td>^</td>
</tr>
<tr>
<td>Treasury Bills</td>
<td>SHV</td>
<td>0.08%</td>
<td>0.07%</td>
<td>^</td>
</tr>
</tbody>
</table>
<p>  Trend score is the average of 1,4,13,26 and 52 week total returns (including dividend reinvested).<br /> You can get a <a href="http://www.myplaniq.com/LTISystem/api__customize.action">no cost widget </a>for any of these tables which will automatically update weekly.</p>
<p><a rel="lightbox" href="http://www.myplaniq.com/LTISystem/article_toptablechart.action?tableName=FixedIncomeReturnTable"> <img src="http://www.myplaniq.com/LTISystem/article_toptablechart.action?tableName=FixedIncomeReturnTable"     width='600' height='400' /> </a></p>
<p><a rel="lightbox" href="http://www.myplaniq.com/LTISystem/article_lowtablechart.action?tableName=FixedIncomeReturnTable"> <img src="http://www.myplaniq.com/LTISystem/article_lowtablechart.action?tableName=FixedIncomeReturnTable"     width='600' height='400' /> </a></p>
</div>
<div></div>
<div>At the end of last week (5/6/2011), high yield bond ETFs, represented by the SPDR Barclays Capital High Yield (JNK), stood among the top of the Fixed Income Return Table. Yields in the sector have declined as risk premiums have tightend on stronger performance by companies with lower credit ratings. While returns on corporate bonds have declined slightly in recent periods, ETFs that track the market have continually offered strong returns relative to other fixed income securities. </div>
<div></div>
<div>
<div id="highYieldBonds" class="back">
<h2><span> U.S. High Yield Bonds</span></h2>
<p><span>05/06/2011</span></p>
<div class="dividerTop">
<table id="HighYieldBond" class="tablesorter" border="2" cellspacing="2" cellpadding="2">
<thead>
<tr>
<th > Description </th>
<th > Symbol </th>
<th > 1 Yr </th>
<th > 3 Yr </th>
<th > 5 Yr </th>
<th > Avg. Volume(K) </th>
<th > 1 Yr Sharpe </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td>iShares iBoxx $ High Yield Corp</td>
<td><a href="http://www.myplaniq.com/LTISystem/jsp/fundcenter/View.action?symbol=HYG&amp;type=1&amp;includeHeader=true" target="_blank">HYG</a></td>
<td>17.67%</td>
<td>7.03%</td>
<td>NA</td>
<td>1,247</td>
<td>270.24%</td>
</tr>
<tr class="odd">
<td>SPDR Barclays Capital High Yield</td>
<td><a href="http://www.myplaniq.com/LTISystem/jsp/fundcenter/View.action?symbol=JNK&amp;type=1&amp;includeHeader=true" target="_blank">JNK</a></td>
<td>20.83%</td>
<td>8.41%</td>
<td>NA</td>
<td>2,972</td>
<td>279.79%</td>
</tr>
<tr class="even">
<td>PowerShares Fundamental High Yield</td>
<td><a href="http://www.myplaniq.com/LTISystem/jsp/fundcenter/View.action?symbol=PHB&amp;type=1&amp;includeHeader=true" target="_blank">PHB</a></td>
<td>19.2%</td>
<td>0.79%</td>
<td>NA</td>
<td>302</td>
<td>318.25%</td>
</tr>
</tbody>
</table>
</div>
<div></div>
<div></div>
<div>Among US High Yield Bond ETFs, the top performers include the SPDR Barclays Capital High Yield (JNK), the Powershares Fundamental High Yield ETF (PHB), and the iShares iBoxx $ High Yield Corporate ETF (HYG) returning 20.83%, 19.20%, 17.67% respectively in the past year.</div>
<div></div>
<div>With the highest one-year return and the highest trading volume, the SPDR Barclays Capital High Yield ETF remains a srtong investment option. The ETF is well diversified, with no single bond comprising more than 4% of total assets and the top 10% of assets making up only 22.58% of the total. </div>
<div></div>
<div>Going forward, yields on high yield corporate debt should continue to tighten as long as companies continue to generate strong performance. Still, high yield corporate bond ETFs should continue to offer attractive returns relative to other fixed income assets. </div>
<div></div>
<div>Corporate bonds are an important component of diversified bond portfolios, as they offer greater returns and risks than government bonds. Due to their high level of interest paid, generally in the form of monthly distributions, corporate bond ETFs may be especially suitable for individuals approaching or already in retirement. As with any investment, it is important to make sure the risk and return levels match up with your personal investment goals. </div>
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<div><strong>Symbols:</strong> <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=AGG&amp;count=00155'>AGG</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=BND&amp;count=00172'>BND</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=SHV&amp;count=0091'>SHV</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=SHY&amp;count=0090'>SHY</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=IEF&amp;count=0090'>IEF</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=TLH&amp;count=0019'>TLH</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=TLT&amp;count=0092'>TLT</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=TIP&amp;count=0040'>TIP</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=WIP&amp;count=0027'>WIP</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=HYG&amp;count=00104'>HYG</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=JNK&amp;count=0096'>JNK</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=PHB&amp;count=0090'>PHB</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=CSJ&amp;count=0073'>CSJ</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=CIU&amp;count=00118'>CIU</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=LQD&amp;count=0073'>LQD</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=BWX&amp;count=0053'>BWX</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=CMF&amp;count=0014'>CMF</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=NYF&amp;count=0014'>NYF</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=MUB&amp;count=0087'>MUB</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=MBB&amp;count=0078'>MBB</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=PCY&amp;count=0038'>PCY</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=EMB&amp;count=0035'>EMB</a><br /> <strong></strong></div>
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<div><strong>Tickers:</strong> (NYSE: AGG), (NYSE: BND), (NYSE: SHV), (NYSE: SHY), (NYSE: IEF), (NYSE: TLH), (NYSE: TLT), (NYSE: TIP), (NYSE: WIP), (NYSE: HYG), (NYSE: JNK), (NYSE: PHB), (NYSE: CSJ), (NYSE: CIU), (NYSE: LQD), (NYSE: BWX), (NYSE: CMF), (NYSE: NYF), (NYSE: MUB), (NYSE: MBB), (NYSE: PCY), (NYSE: EMB)</div>
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<p> </p>
<p ><strong><span style="color: #1e2d3b;">Disclosure:</span></strong></p>
<p><span style="color: #333333;"><a href="http://www.myplaniq.com/LTISystem/f401k__main.action">MyPlanIQ </a>does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.</span></p></div>
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<p>Emerging market bonds have become a large part of many investors' portfolios in  recent years. This can be attributed to an increase in the credit quality of the bonds  of foreign countries and companies. These bonds generally offer higher yields than T reasury bonds and domestic corporate bonds. ETFs that track this market allow investors  to diversify across many international regions and across countries of various size and  economic strength.</p>
<p>Recently, Emerging Market Bond ETFs have performed well when compared to other Fixed  Income Assets. With a trend score of 2.21%, Emerging Market Bond ETFs, represented by PowerShares Emerging Markets Sovereign Debt Portfolio (PCY) have shown  improvement in recent periods. This can be attributed to the continued growth and  economic strengthening of many developing nations along with the desire by many  investors to move money away from developed nations that have encountered economic  trouble.</p>
<p> </p>
<h2>Fixed Income Return Table</h2>
<h3>4/29/2011</h3>
<table border="0" cellspacing="10">
<tbody>
<tr>
<th align="left"><strong>Assets Class</strong></th>
<th><strong>Symbols</strong></th>
<th><strong>04/29<br />Trend<br /> Score</strong></th>
<th><strong>04/21<br />Trend<br /> Score</strong></th>
<th><strong>Direction</strong></th>
</tr>
<tr>
<td>International Inflation Protected</td>
<td>WIP</td>
<td>9.22%</td>
<td>7.53%</td>
<td>^</td>
</tr>
<tr>
<td>International Treasury</td>
<td>BWX</td>
<td>6.82%</td>
<td>4.91%</td>
<td>^</td>
</tr>
<tr>
<td>High Yield</td>
<td>JNK</td>
<td>5.68%</td>
<td>5.88%</td>
<td>v</td>
</tr>
<tr>
<td>Inflation Protected</td>
<td>TIP</td>
<td>3.27%</td>
<td>2.89%</td>
<td>^</td>
</tr>
<tr>
<td>Long Term Credit</td>
<td>LQD</td>
<td>2.87%</td>
<td>2.43%</td>
<td>^</td>
</tr>
<tr>
<td>Emerging Mkt Bonds</td>
<td>PCY</td>
<td>2.21%</td>
<td>1.52%</td>
<td>^</td>
</tr>
<tr>
<td>Intermediate Term Credit</td>
<td>CIU</td>
<td>2.06%</td>
<td>1.74%</td>
<td>^</td>
</tr>
<tr>
<td>California Muni</td>
<td>CMF</td>
<td>1.99%</td>
<td>0.42%</td>
<td>^</td>
</tr>
<tr>
<td>MBS Bond</td>
<td>MBB</td>
<td>1.83%</td>
<td>1.32%</td>
<td>^</td>
</tr>
<tr>
<td>US Total Bond</td>
<td>BND</td>
<td>1.77%</td>
<td>1.39%</td>
<td>^</td>
</tr>
<tr>
<td>10-20Year Treasury</td>
<td>TLH</td>
<td>1.73%</td>
<td>1.02%</td>
<td>^</td>
</tr>
<tr>
<td>Intermediate Treasury</td>
<td>IEF</td>
<td>1.65%</td>
<td>1.06%</td>
<td>^</td>
</tr>
<tr>
<td>20+ Year Treasury</td>
<td>TLT</td>
<td>1.63%</td>
<td>1.12%</td>
<td>^</td>
</tr>
<tr>
<td>National Muni</td>
<td>MUB</td>
<td>1.24%</td>
<td>0.84%</td>
<td>^</td>
</tr>
<tr>
<td>Short Term Credit</td>
<td>CSJ</td>
<td>1.09%</td>
<td>0.89%</td>
<td>^</td>
</tr>
<tr>
<td>Short Term Treasury</td>
<td>SHY</td>
<td>0.53%</td>
<td>0.46%</td>
<td>^</td>
</tr>
<tr>
<td>New York Muni</td>
<td>NYF</td>
<td>0.51%</td>
<td>0.06%</td>
<td>^</td>
</tr>
<tr>
<td>Treasury Bills</td>
<td>SHV</td>
<td>0.07%</td>
<td>0.09%</td>
<td>v</td>
</tr>
</tbody>
</table>
<p>The trend score is defined as the average of 1,4,13,26 and 52 week total returns (including dividend reinvested).</p>
<p>In the past year, ETFs tracking Emerging Market Bonds have offered investors strong  performance, slightly above historical levels. EMB iShares JPMorgan USD Emerging Markets  ETF (EMB) lead within the sector, growing 9.3% in the past year. Over the past three years  EMB has returned 7.44%. Another strong performer in Emerging Market Bond ETFs has been PCY  PowerShares Emerging Markets (PCY), gaining 8.7% in the past year, slightly above its  three year growth of 8.32%.</p>
<p> </p>
<h2>Emerging Market Bonds</h2>
<h3>4/29/2011</h3>
<table border="2">
<tbody>
<tr>
<td>Description</td>
<td>Symbol</td>
<td>1 Year</td>
<td>3 Years</td>
</tr>
<tr>
<td>EMB iShares JPMorgan USD Emerg Mkt</td>
<td>EMB</td>
<td>9.3%</td>
<td>7.44%</td>
</tr>
<tr>
<td>PCY PowerShares Emerging Mkts</td>
<td>PCY</td>
<td>8.7%</td>
<td>8.32%</td>
</tr>
</tbody>
</table>
<p> </p>
<p>As developing economies continue to improve, Emerging Market Bond ETFs will remain an  important part of a well-diversified portfolio. With developed nations like the United  States, Japan, and certain European countries experiencing economic instability,  market participants will likely continue moving towards emerging market assets like Bond  ETFs.</p>
<p>Disclosure: MyPlanIQ does not have any business relationship with the company or  companies mentioned in this article. It does not set up their retirement plans.  The performance data of portfolios mentioned above are obtained through historical  simulation and are hypothetical.</p>
<p>Tickers: (NYSE: PCY), (NYSEArca: EMB), (NYSE: PCY), (NYSE: EMB), (NYSE: WIP), (NYSE: BWX), (NYSE: JNK), (NYSE: TIP), (NYSE:LQD), (NYSE:.PCY), (NYSE: CIU), (NYSE: CMF), (NYSE: MBB), (NYSE: BND), (NYSE: TLH), (NYSE: IEF), (NYSE: TLT), (NYSE: MUB), (NYSE: CSJ), (NYSE: SHY), (NYSE: NYF), (NYSE: SHV)</p>
<p> </p>
<p>Symbols: <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=PCY&amp;count=0035'>PCY</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=EMB&amp;count=0034'>EMB</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=WIP&amp;count=0025'>WIP</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=BWX&amp;count=0051'>BWX</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=JNK&amp;count=0094'>JNK</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=TIP&amp;count=0038'>TIP</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=LQD&amp;count=0071'>LQD</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=PCY&amp;count=0035'>PCY</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=CIU&amp;count=00116'>CIU</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=CMF&amp;count=0012'>CMF</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=MBB&amp;count=0076'>MBB</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=BND&amp;count=00168'>BND</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=TLH&amp;count=0017'>TLH</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=IEF&amp;count=0088'>IEF</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=TLT&amp;count=0090'>TLT</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=MUB&amp;count=0085'>MUB</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=CSJ&amp;count=0071'>CSJ</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=SHY&amp;count=0088'>SHY</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=NYF&amp;count=0012'>NYF</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=SHV &amp;count=001'>SHV </a></p>
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<p>Are you prepared for the end of QE2?</p>

<p>The end of Quantitative Easing will no doubt be a shock for the American stock markets, as well as for global markets. It's not a question of if but <em>when</em> it will end. And when it does, you need to be ready.</p>

<p>The following trading ideas will help you profit from the fateful day Big Ben announces the end of easy money and zero percent federal funds rate.</p>

<p><strong>Gold Short ETN</strong> – The PowerShares DB Gold Short ETN (NYSE: <a class="ticker" href="/stock/dgz#NYSE">DGZ</a>) follows the opposite of the gold price. You will not want to be caught on the long side of the gold trade when the Fed decides to raise interest rates. There is no doubt that a stronger dollar will eat away at the gold price. All things likely, investors' immediate reactions will be a rush for the exits. Without a doubt, there will be a sharp correction to the price of gold; a short position will be a good hedge against the temporary damage that the Fed's announcement may do to the markets. </p>

<p><strong>Crude Oil Short ETN</strong> – The gold short principle also applies to oil, as a stronger dollar buys more oil (for lack of a more complex explanation). Investors will certainly be in a rush to abandon their long oil positions after Big Ben announces a fed tightening, and you can profit from PowerShares DB Crude Oil Short ETN (NYSE: <a class="ticker" href="/stock/szo#NYSE">SZO</a>), which moves inversely to the price of oil.</p>

<p><strong>ProShares Short QQQ ETF</strong> – The Short QQQ ETF (NYSE: <a class="ticker" href="/stock/psq#NYSE">PSQ</a>) moves inversely to the NASDAQ 100, and is a good general hedge against sharp negative moves in the market. This ETF would be good to scoop up a few days ahead of the Fed announcement.</p>

<p><strong>VIX Futures ETN</strong> – The VIX Short-Term Futures ETN (NYSE: <a class="ticker" href="/stock/vxx#NYSE">VXX</a>) follows the Volatility Index, which is the measure of shorts and other hedges against long positions. Investors will definitely be buying downside protection for their long positions after the Fed announces its first rate increase. If you're not privy to shorting gold and oil, you can profit from the spike in the VIX by buying this ETN.</p>

<p><strong>Barclays 10-20 Yr Treasury Bond ETF</strong> – The 10-20 year Treasury Bond ETF (NYSE: <a class="ticker" href="/stock/tlh#NYSE">TLH</a>) seeks results that correspond to the performance of US Treasury Bond obligations with maturities between 10 and 20 years. Expect this one to pop when the Fed decides to hike rates, as its value will rise as treasuries' valuations rise.</p>

<p><strong>Disclaimer</strong>
Neither Benzinga nor its staff recommends that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you perform your own due diligence and consult a certified financial professional for personalized advice about your financial situation.</p>

Barclays Bank iPath S&P 500 VIX Short-Term Futures ETN

Five Stocks For The End Of QE2 (DGZ, SZO, PSQ, VXX, TLH)

<p><strong><em>By John Nyaradi, Wall Street Sector Selector</em></strong></p>
<p>Markets powered higher last week and we remain in “green flag” status since repositioning our portfolios on December 3rd.    </p>
<p>This week will be the last full trading week of the year and markets are overbought and overextended but seem positioned for more gains as we head towards 2011. </p>
<p><strong>Looking At My Screens</strong><br />
 <img style="margin: 5px; border: 0px;" src="https://origin.ih.constantcontact.com/fs008/1101657887172/img/193.png" border="0" alt="" hspace="5" vspace="5" width="421" height="436" /></p>
<p> Chart courtesy of <a href="http://r20.rs6.net/tn.jsp?llr=eou954bab&amp;et=1104061522005&amp;s=0&amp;e=001ysQz3R-OlxqCoHi3k9X4DYXnv8AMTwDTuzjW0qsb0JKj9dGyOGmvzQa_VKPL_alJvSa0GuMLW5iYgo1D0cCTQygx6Wy7cd6ipuaxHW1CmPM=" target="_blank">http://www.stockcharts.com</a></p>
<p> In the chart above we can see how the S&amp;P 500 broke into new territory with a double top breakout on December 7th.  A “sell” signal would be generated with a break below 1190 and you can see signifcant support at the 1210-1220 level.</p>
<p> <strong>The View from 35,000 Feet</strong></p>
<p>Big news last week came from China where the inflation rate came in at 5% and so prompted more speculation about an impending interest rate hike.</p>
<p> At home,  bullish optimism among U.S. investors remains at extreme levels while the yield on the 10 year Treasury rose to highs last seen in August, 2009, and consumer confidence rose from 71.6% to a better than expected 74.2%.  Jobless claims declined to 421,000 from 438,000 previous and 425,000 expected. </p>
<p>Many economists are making upward revisions to their forecasts for 2011 economic growth based on the assumption that the Bush tax cuts will be extended by Congress this week.  Of course, how to pay for this all remains a discussion for another day. </p>
<p>The Fed announced they would be buying $105 Billion in assets between December 13 and January 11 in their ongoing “QE2″ efforts while Representative Ron Paul will be Chairman of the House Domestic Monetary Policy Committee which oversees the Fed.  This will be interesting to watch as Ron Paul has written a book called “End The Fed.” </p>
<p>Overseas, Fitch dropped its credit rating on Ireland while German Chancellor Merkel said the future of the Euro is non negotiable.  Quite likely we will see more acts in this drama unfolding in the new year.<strong> </strong></p>
<p> <strong>What It All Means</strong><strong> </strong></p>
<p>As we head for Christmas and year end, the “Santa Rally” remains firmly in place, although overbought conditions, complacency and low volumes could generate significant volatility in the last trading days of the year.  Fundamentals appear to be improving based on actions by the Fed and Congress, while technically, new highs have been reached and a solid floor rests beneath major indexes. </p>
<p>A misstep by Congress regarding the tax cut legislation or an interest rate hike by China are potential negatives facing the coming week's activity. </p>
<p>We remain in “green flag” status, expecting higher prices ahead.</p>
<p> <em>Probability favors Christmas cheer versus a lump of coal in our stockings this year.</em>  </p>
<p><strong>The Week Ahead</strong></p>
<p>The week will bring lots of economic reports and earnings from important companies like Best Buy on Tuesday, and FedEx and Oracle on Thursday. </p>
<p><strong>Tuesday: </strong>November Producer Price Index, November Retail Sales, FOMC meeting/statement </p>
<p><strong>Wednesday: </strong>November Consumer Price Index, December Empire State Index, November Industrial Production, December Homebuilders Index</p>
<p><strong>Thursday: </strong>Initial and continuing unemployment claims, November Housing Starts, December Philadelphia Fed</p>
<p> <strong>Friday: </strong>November Leading Economic Indicators </p>
<p><strong>Sector Spotlight:</strong><strong> </strong></p>
<p><strong>Winners: </strong>Viet Nam(<a class="ticker" href="/stock/vnm#">VNM</a>), Financials (<a class="ticker" href="/stock/xlf#">XLF</a>)   </p>
<p><strong>Losers: </strong>Turkey (<a class="ticker" href="/stock/tur#">TUR</a>), Brazil (<a class="ticker" href="/stock/ewz#">EWZ</a>), 10 Year Bonds (<a class="ticker" href="/stock/tlh#">TLH</a>) </p>
<p>Friday evening I went for a walk in the snowy darkness and passed a darkened home that had been foreclosed upon earlier this year.  In stark contrast, the home next door had a bright Chritsmas tree in its living room window, but there was little cheer in that scene except to hope that maybe recent dark days are behind us.</p>
<p> <a href="http://www.supersectors.net"><strong><em>Good Holiday Reading</em></strong> </a></p>
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<div>Disclosure: Wall Street Sector Selector holds various ETF positions and positions can change at any time.</div>
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iShares MSCI Turkey Investable Market Index Fund

Christmas Cheer or Lump of Coal? (SPY, DIA, IWM, TLT)

<p>Yesterday there was an article on Seeking Alpha with a fantastic title; <a href="http://seekingalpha.com/article/213663-with-3-5-and-10-year-stock-returns-negative-why-are-pension-funds-assuming-8-returns">With 3, 5, and 10 Year Stock Returns Negative, Why Are Pension Funds Assuming 8% Returns</a>? I tweeted <span style="font-style: italic;">because they have to</span>.</p>
<p>A chart of the US stock market for last 100 years shows that for big chunks of time the market goes up a lot and then there are big chunks of time where it takes a very bumpy ride to nowhere.</p>
<p><span class="fullpost">For people who don't want to be very active with their investing but who take the time to develop a basic understanding of this the task can be made a little easier. Some people like to hone in on these cycles lasting 18 years and while that might be a little simplistic going forward the nature of the past cycles combined with the current fundamental backdrop argues for more <span style="font-style: italic;">bumpy round trip to nowhere</span> trading for a few years.</span></p>
<p><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://2.bp.blogspot.com/_7ZckZ-8naz0/TDZxfMeBWNI/AAAAAAAADWQ/3oX3Vy3N76s/s1600/DJIA+from+1900.JPG"><img style="float: left; margin: 0pt 10px 10px 0pt; cursor: pointer; width: 320px; height: 242px;" src="http://2.bp.blogspot.com/_7ZckZ-8naz0/TDZxfMeBWNI/AAAAAAAADWQ/3oX3Vy3N76s/s320/DJIA+from+1900.JPG" alt="" id="BLOGGER_PHOTO_ID_5491701576361924818" border="0" /></a>The chart comes from Cam Hui who writes the <a href="http://humblestudentofthemarkets.blogspot.com/">Humble Student of the Market</a> blog. I have unyielding faith there will be some sort of repeat of what the market did from 1944 until 1962 and then again from 1982 until 2000. Maybe it will start in 2018 and maybe it won't be as much is those two other periods but something similar will come.</p>
<p>The ideal way to navigate this would be some sort of strategy that deemphasizes equities in a period like 1966-1982. This could mean relatively heavy doses of ETFs like iShares COMEX Gold Trust (IAU), inflation protected products like the SPDR Barclays TIPS ETF (IPE) if things look inflationary or regular bond funds like the iShares Barclays 10-20 Year Treasury Bond Fund (TLH) in an environment that appears to be deflationary, like now. In addition to that some sort of absolute return product like the IndexIQ Hedge Macro Tracker ETF (MCRO). The big idea is to protect assets in an environment where equities do not do well.</p>
<p>Then after 18 years one would ideally rotate into some sort of aggressive equity exposure to capture a likely five-bagger, or more, in the market.</p>
<p>I use the word "ideal" because perfect execution would require perfect information and that is of course unlikely. This could be partially mitigated by simply reducing equity exposure after 15-20 years of raging bull market as opposed to eliminating it. Something like the PowerShares Buy Write Portfolio (PBP) which some clients own could be one way to do this. I would also add that after 15-20 years of <span style="font-style: italic;">bumpy round trip to nowhere</span> anyone on this sort of path should start increasing equity exposure.</p>
<p>This is a vague but evolving thought but I believe it is best suited to people who are willing to spend only some time on their investments as opposed to no time or a lot of time. As I have pointed out numerous times despite the fact that the S&amp;P 500 was down 24% price-wise in the recently ended decade many easily accessible countries thrived. Mexico was up 345%, Brazil up 301%, India up 243%, Norway up 121% and Israel up 109% as some examples.</p>
<p>This is not to say that those countries will continue to perform like that if the cycle continues in the US until 2018 but some countries will (maybe those, maybe others) and for people willing to do a lot of work the notion of hiding as outlined above becomes less relevant.</p>
<p>The relevance of the first line of the post is that as a do it yourselfer, <span style="font-style: italic;">if you save properly</span> make the access a lot easier. , you are better positioned to take what the market gives. Many pensions obviously were not able to average 8% per year in the last decade and some did far worse by chasing heat or putting too much in private investments that blew up. If markets can recover from the Great Depression it can recover from the current event. The only variable will be time. You can hide out, which is perfectly valid, or you can take the time to find healthier countries to own and obviously ETFs.<br />
<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/8532070-5938233647462885187?l=randomroger.blogspot.com' alt='' /></div>
</p>

MCRO

Is There Anything to the 18 Year Theory?

<p>Volatility Is Back<br />
Chicago Board Options Exchange Volatility Index (<a class="ticker" href="/stock/vix#">VIX</a>) has gained 50% last week: </p>
<p>Last 2 weeks the market sold off on both positive and negative news.  Many analysts rushed to change market outlooks from uptrend to confirmed downtrend.  Is the long-awaited stock market correction finally arriving?  </p>
<p>S&amp;P 500 Index Daily Volume is not High Enough<br />
Last 9 trading days’ trading volume is less than2009’s average:<br />
Period	Average Daily Volume<br />
2009 ( Whole Year)	5,571,025,000<br />
Last 9 Days of Jan 2009	5,836,563,000<br />
Last 9 Days of Jan 2010	5,335,111,000</p>
<p>15 High Yield iShares ETFs<br />
When the market turns south, think defense.  Followings are iShares ETFs with net assets over $100 million and have yields over 3.5%:</p>
<p>Asset Class	 Name (Symbol)	P/E (ttm)	Yield<br />
Equity	Dow Jones Select Dividend Index  (NYSE: <a class="ticker" href="/stock/dvy#NYSE">DVY</a>)	19	3.7<br />
Equity	Dow Jones U.S. Real Estate Index  (NYSE: <a class="ticker" href="/stock/iyr#NYSE">IYR</a>)	40	4.3<br />
Equity	Dow Jones U.S. Utilities Sector Index  (NYSE: <a class="ticker" href="/stock/idu#NYSE">IDU</a>)	16	3.6<br />
Equity	MSCI Austria Investable Market Index  (NYSE: <a class="ticker" href="/stock/ewo#NYSE">EWO</a>)	32	4.5<br />
Equity	MSCI Taiwan Index  (NYSE: <a class="ticker" href="/stock/ewt#NYSE">EWT</a>)	29	4.7<br />
Equity	MSCI Turkey Investable Market Index  (NYSE: <a class="ticker" href="/stock/tur#NYSE">TUR</a>)	16	4.9<br />
Equity	S&amp;P U.S. Preferred Stock Index  (NYSE: <a class="ticker" href="/stock/pff#NYSE">PFF</a>)	--	6.9<br />
Fixed Income	Barclays 10-20 Year Treasury Bond  (NYSE: <a class="ticker" href="/stock/tlh#NYSE">TLH</a>)	--	4.1<br />
Fixed Income	Barclays 20+ Year Treasury Bond  (NYSE: <a class="ticker" href="/stock/tlt#NYSE">TLT</a>)	--	4.4<br />
Fixed Income	Barclays Credit Bond  (NYSE: <a class="ticker" href="/stock/cft#NYSE">CFT</a>)	--	4.2<br />
Fixed Income	Barclays Intermediate Credit Bond  (NYSE: <a class="ticker" href="/stock/ciu#NYSE">CIU</a>)	--	3.5<br />
Fixed Income	iBoxx $ High Yield Corporate Bond  (NYSE: <a class="ticker" href="/stock/hyg#NYSE">HYG</a>)	--	8.5<br />
Fixed Income	iBoxx $ Investment Grade Corp Bond (NYSE: <a class="ticker" href="/stock/lqd#NYSE">LQD</a>)	--	4.7<br />
Fixed Income	JPMorgan USD Emerging Markets Bond  (NYSE: <a class="ticker" href="/stock/emb#NYSE">EMB</a>)	--	5.7<br />
Fixed Income	S&amp;P California AMT-Free Muni Bond  (NYSE: <a class="ticker" href="/stock/cmf#NYSE">CMF</a>)	--	3.5</p>
<p>12-Month-Yield vs. 30-Day SEC Yield<br />
There are 2 populate ways to calculate yields.  iShares uses 30-day SEC yield.  This calculation is developed by SEC for bond fund and based on a 30-day period ending on the last day of the previous month.  </p>
<p>The other is 12-Month-Yield, which is the sum of a fund’s total trailing 12-month interest and dividend payments.  The 12-month number has the virtue of reflecting a longer time period, but it's backward-looking. A stock may have a high yield, but if the company is in trouble, it might not be able to sustain its dividend.  </p>
<p>Following table compares yield difference using 2 calculations:<br />
Name (Symbol)	12-Month-Yield 	30-Day SEC Yield<br />
Barclays TIPS Bond Fund (NYSE: <a class="ticker" href="/stock/tip#NYSE">TIP</a>)	2.6%	0.7%<br />
Dow Jones U.S. Utilities Sector Index  (NYSE: <a class="ticker" href="/stock/idu#NYSE">IDU</a>)	3.9%	3.6%<br />
MSCI Turkey Investable Market Index  (NYSE: <a class="ticker" href="/stock/tur#NYSE">TUR</a>)	1.5%	4.9%</p>
<p>Reposition Emerging Markets Assets<br />
In his book Security Analysis, Ben Graham remarked that buying stocks with P/E over 20 was speculating more than investing, because that meant you were willing to accept an "earnings yield" of less than 5% on a risky asset.</p>
<p>For yield-seeking investors, emerging market’s investment value has continued to diminish following the past 9 months rally.   In the list above, MSCI Taiwan Index (NYSE: <a class="ticker" href="/stock/ewt#NYSE">EWT</a>)’s P/E is 29.  Another related one is iShares MSCI Hong Kong Index (NYSE: <a class="ticker" href="/stock/ewh#NYSE">EWH</a>) and its P/E is 27.  Both highly depend on mainland China’s economy. </p>
<p>Donald Tsang, Hong Kong Chief Executive, recently admitted that he has grown pessimistic on the city's economy because Hong Kong could see a double-dip recession in the near future.  Hong Hong’s real estate market is the backbone of its economy.  EWH currently holds 62% of its assets in financial sector. </p>
<p>Even though people might argue house price in Beijing look relatively affordable as compared to Manhattan ( <a href="http://finance.yahoo.com/news/China-Real-Estate-Bubble-a-tsmf-3005546357.html?x=0" title="http://finance.yahoo.com/news/China-Real-Estate-Bubble-a-tsmf-3005546357.html?x=0">http://finance.yahoo.com/news/China-Real-Estate-Bubble-a-tsmf-3005546357.html?x=0</a>), in an effect to cool the overheating Chinese property market, this year Bank of China has raised rate on one-year bill and increased the amount of funds banks are required to place on reserve.  Such moves will have ominous affects on Hong Kong.  Just like old-say "Don't Fight the Fed" in U.S, in China it is "Don't Fight the Government".</p>
<p>Conclusion<br />
Does the government, in its zeal to end the crisis at all costs, bring about unbridled inflation, driving early all prices sharply higher?  Or does the sinking economy bring deep deflation, driving nearly all prices sharply lower?  Inflation may ease the pain of debtors temporarily and help provide the semblance of a recovery. But such benefits are almost invariably short lived.  They are limited to a privileged few.  And even if they are more widespread or last a bit longer, they almost inevitably backfire in the form of new bubbles, new busts, and ultimately an even deeper depression, according to Martin Weiss, author of The Ultimate Depression Survival Guide.</p>
<p>If you don’t want to guess trend of interest rate, Vanguard Total Bond Market ETF (NYSE: <a class="ticker" href="/stock/bnd#NYSE">BND</a>) might be good for you.  It is a blended ETF, which consists of Treasury, U.S. agency bonds, corporate and foreign bonds and mortgage-backed securities. Its 12-month-yield is 4%.</p>
<p>S&amp;P 500 index was down 6.7% from its Jan 19’s high.  However, trading volume was lower than last year; Volatility index was not even close to 1 year ago; Dow Jones Industrial Average index is fairly valued (<a href="http://seekingalpha.com/article/170336-what-s-the-fair-value-for-the-dow-jones-industrial-average" title="http://seekingalpha.com/article/170336-what-s-the-fair-value-for-the-dow-jones-industrial-average">http://seekingalpha.com/article/170336-what-s-the-fair-value-for-the-dow-jones-industrial-average</a>). It might suggest it is only a pullback and not the beginning of double-dip.  Most investors do an awful job of timing the market, consistently sell-low-buy-high.   Even professional investors’ crystal balls turn smoky these days, it's better for retail investors to stick with your long-term asset allocation plans. </p>
<p>Disclose: I have long position on TIP.  Data are from iShares (<a href="http://us.ishares.com" title="http://us.ishares.com">http://us.ishares.com</a>), Google and Yahoo Finance as of January 29, 2010.</p>
<p>Stocks:  BND, CFT, CIU, CMF, DVY, EMB, EWO, EWT, HYG, IDU, IYR, LQD, PFF, TIP, TLH, TLT, TUR</p>


$VIX

iShares Dow Jones Select Dividend Index Fund

iShares Trust Dow Jones US Utilities Sector Index Fund

iShares Trust Dow Jones US Real Estate Fund Index

iShares S&P US Preferred Stock Index Fund


John BoozmanSenate (R-AR)	$1K - $15K	Purchase	May 08, 2024	Feb 20, 2024	Senate
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