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...The small increase triggered a sell-off in bond prices, with yields on the 10-year US Treasury bond rising to their highest level in a month....
...“A fee skirmish broke out in high-yield index ETFs in July, when [Charles] Schwab entered the high-yield bond market at the same price as the lowest-cost high-yield bond ETF [State Street’s high-yield bond...
...The average maturity of UK debt stands at nearly 15 years, about double the US Treasury market, a legacy of pension funds’ insatiable appetite for long-term debt over the past few decades....
...Money funds, which invest in very short-term securities and offer daily access, are dominated by a handful of very large players led by Fidelity, Vanguard, JPMorgan and BlackRock....
...The top 1,000 most referenced stock and bond market indices in the US fund industry have about $13.5tn of assets benchmarked against them, and are tracked by $18.6tn, according to Morningstar....
...Using a cash fund to pay income in the short term, say two to five years, could help too....
...Some analysts say the abundance of cash parked in money market funds, which invest in ultra-short term government debt, acts as a potential source of continued demand for Treasuries....
...It needs short-term cash. Enter a suddenly hot convertible bond market. Super Micro recently sold $1.5bn of this hybrid debt, which includes the ability for holders to convert their notes into equity....
...“The once steady stream into bond ETFs witnessed a slowdown, reflecting investor recalibration of rate-cut expectations,” says Garcia-Zarate....
...Even if it goes away in the short term, there’s always the worry that it might return — with even low levels a concern for retirees....
...Bassman: Best-case scenario: you’re short vol and the market doesn’t move. The worst case is that rates move a lot in the short term since you are short convexity....
...“We’ve seen evidence of clients taking money out to meet short-term needs this year. There’s been an element of a retreat to safety, look at immediate needs rather than long-term goals.”...
...But pension managers typically want long-term and guaranteed income to fund payouts to retirees, so Perenna will have to carefully manage the terms of its bond issuance to balance meeting investors’ demands...
...“Our perspective is that these products do not align with our offer focused on asset classes, such as equities, bonds, and cash, which Vanguard views as the building blocks of a well-balanced, long-term...
...In the short term, that fosters a celebratory mood....
...Rokos made big gains in 2020 during the early stages of the coronavirus pandemic, but late the following year he was wrongfooted by the sell-off in short-term government debt, as investors began to panic...
...“While more money flowing into gilts made up the bulk of this increase, investors also added cash to corporate bond funds across a range of sectors.”...
...MFA, for example, is also suing the agency over a rule seeking to broaden disclosures for private funds as well as rules on securities lending and short selling....
...The ETFs represent BondBloxx’s foray into the investment-grade corporate bond universe, Bianco said, adding that the fixed-income ETF market has been “underserved” relative to equities in terms of choice...
...The Fed is expected to cut this year, but the sheer supply of longer-term notes and bonds surprised markets last year....
...Some private creditors, particularly African banks, owning a portion of the defaulted bonds also had reservations about current terms for replacing their debt, the government said....
...Kevin Gordon, senior investment strategist at Charles Schwab, said: “The Fed could find itself in a pickle if it starts lowering rates off the back of labour market weakness but higher inflation in January...
...But the changing nature of those indices is not something that you’d necessarily dig into all the time to get a view as to, you know, what does emerging market do in terms of like correlation with other...
...However, a larger determinant of these products’ long-term profitability will be their ability to pass muster with the fund analysts and financial advisers who vet funds and add them to client portfolios...
...In the short term, this will lead to lower growth and inflation, as monies which would have been invested in the private sector capital stock are spent on public debt service and repayment instead....
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