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Long-Term Bond ETFs: Coming Back In Style

By: ETFdb
Uncertainty over the prospects for the global economic recovery in recent months has prompted some investors to vacate equity positions in favor of safe havens that tend to perform well in turbulent economic environments [see Five Safe Haven ETFs]. Once upon a time, long-term bonds would have been a popular option for investors seeking safety. But this sub-asset class has fallen out of favor in the post-stimulus environment, as investors have expressed anxiety over the potentially devastating impact of eventual rate hikes. To stimulate growth as the recession intensified, governments around the world (including the U.S.) cut interest rates to record lows. Interest rates and bond prices generally move in opposite directions, and a longer maturity generally translates into a greater sensitivity to rate changes. With rates at near-zero levels, there is nowhere to go but up, a development that could have an adverse impact on fixed income securities with maturities [...] Click here to read the original article on ETFdb.com. Related Stories: Market Turmoil Boosts Long-Term Government Bond ETFs Time For An International Corporate Bond ETF? State Street Launches Corporate Bond ETF (SCPB)
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