Treasury bond yields keep rising. Two-year Treasury yields got right up to a 5% yield this week, the highest since 2007. Everyone baffled about what to do about the stock market is talking about buying short-maturity Treasuries: why try to figure out stocks when you get almost 5% for two-years risk free? Join us this Monday on ETF Edge at 1 PM ET when we follow up on last week's show with another presentation on how to buy short-term Treasury bonds using ETFs. This week, our guest is Joanna Gallegos, co-founder of BondBloxx. She'll be joined by Kim Arthur of Main Management. What is actionable in bonds? What are trades you should be thinking about? What about longer-dated Treasuries and high yield corporates?
Short-term bond ETFs still raking in billions. The hottest thing on Wall Street right now isn't equities – it's bonds. With yields edging higher seemingly by the day, it's no surprise ETF investors are still snatching up short-term Treasury bonds. The iShares Short Treasury Bond ETF (SHV) – which holds bonds maturing in just up to one year, saw inflows of nearly $2.5 billion last week. That's the biggest weekly surge that fund has seen since March 2020, right in the heart of the pandemic.
Along that vein, there's another new bond ETF around the corner… F/m Investments is launching its 6-Month U.S. Treasury Bill ETF (XBIL) early next week, with the rest of the curve scheduled to roll out at the end of the month. Investor appetite for short-dated single-bond Treasury ETFs continues to climb as the latest string of macro data suggests inflation is still on the stickier side – and that the road to bring it back down won't be nearly as smooth or linear as many would have hoped.
State Street set to revamp its ETF business. The ETF giant plans to merge away its smaller SPDR 600 Small Cap ETF (SLY) into its larger SPDR Portfolio S&P 500 Small Cap ETF (SPSM) starting in early June. Both funds track the S&P Small Cap 600 Index and are part of a low-cost series, charging 5 basis points in fees, including waivers. State Street will also shutter three of its smaller ETFs that offer exposure to corporate bonds, emerging markets ETF and developed markets by mid-April.
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