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Tag: iShares Core U.S. Aggregate Bond ETF

  • iShares Core U.S. Aggregate Bond ETF $AGG Position Increased by Ellenbecker Investment Group

    Ellenbecker Investment Group raised its position in iShares Core U.S. Aggregate Bond ETF (NYSEARCA:AGG – Free Report) by 8.5% in the third quarter, according to its most recent Form 13F filing with the Securities & Exchange Commission. The fund owned 648,841 shares of the company’s stock after acquiring an additional 50,564 shares during the quarter. iShares Core U.S. Aggregate Bond ETF makes up about 9.6% of Ellenbecker Investment Group’s holdings, making the stock its 3rd biggest holding. Ellenbecker Investment Group’s holdings in iShares Core U.S. Aggregate Bond ETF were worth $65,046,000 at the end of the most recent reporting period.

    Other institutional investors and hedge funds also recently added to or reduced their stakes in the company. Ally Invest Advisors Inc. increased its stake in iShares Core U.S. Aggregate Bond ETF by 5.5% in the 2nd quarter. Ally Invest Advisors Inc. now owns 163,385 shares of the company’s stock valued at $16,208,000 after purchasing an additional 8,493 shares in the last quarter. Caldwell Trust Co purchased a new position in shares of iShares Core U.S. Aggregate Bond ETF in the second quarter valued at $10,566,000. Brown Advisory Inc. raised its stake in shares of iShares Core U.S. Aggregate Bond ETF by 27.1% during the 2nd quarter. Brown Advisory Inc. now owns 263,824 shares of the company’s stock worth $26,171,000 after buying an additional 56,205 shares during the last quarter. Aspect Partners LLC boosted its position in shares of iShares Core U.S. Aggregate Bond ETF by 8.5% in the 2nd quarter. Aspect Partners LLC now owns 43,231 shares of the company’s stock worth $4,289,000 after buying an additional 3,405 shares in the last quarter. Finally, Asset Allocation Strategies LLC increased its holdings in iShares Core U.S. Aggregate Bond ETF by 41.8% during the 3rd quarter. Asset Allocation Strategies LLC now owns 83,358 shares of the company’s stock valued at $8,357,000 after acquiring an additional 24,580 shares in the last quarter. Institutional investors and hedge funds own 83.63% of the company’s stock.

    iShares Core U.S. Aggregate Bond ETF Trading Down 0.0%

    Shares of AGG opened at $99.80 on Tuesday. iShares Core U.S. Aggregate Bond ETF has a 12-month low of $95.74 and a 12-month high of $101.35. The stock has a market cap of $134.30 billion, a P/E ratio of 124.57 and a beta of 0.25. The company has a 50-day moving average of $100.42 and a two-hundred day moving average of $99.58.

    About iShares Core U.S. Aggregate Bond ETF

    (Free Report)

    IShares are index funds that are bought and sold like common stocks on national securities exchanges as well as certain foreign exchanges. iShares are attractive because of their relatively low cost, tax efficiency and trading flexibility. Investors can purchase and sell shares through any brokerage firm, financial advisor, or online broker, and hold the funds in any type of brokerage account.

    Further Reading

    Institutional Ownership by Quarter for iShares Core U.S. Aggregate Bond ETF (NYSEARCA:AGG)



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    ABMN Staff

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  • Treasury yields nudge higher ahead of key data releases

    Treasury yields nudge higher ahead of key data releases

    U.S. Treasury yields nudged slightly higher on Tuesday, as market participants await the release of key economic data points later in the week.

    At 5:52 a.m. ET, the yield on the benchmark 10-year Treasury note was around 3 basis points higher at 4.128% while the yield on the 30-year Treasury bond was up around 2.9 basis points at 4.345%.

    Yields move inversely to prices.

    Investors are trying to gauge when the Federal Reserve will begin cutting interest rates, which will be a key determinant of the trajectory for markets and the economy this year.

    Two significant pieces of economic data are on the slate this week: a preliminary fourth-quarter GDP growth figure is due on Thursday, followed by the Commerce Department’s closely-watched personal consumption expenditures price index for December on Friday.

    Despite the uncertain rate outlook, risk-on sentiment remained robust on Monday, as the Dow Jones Industrial Average and the S&P 500 both notched all-time highs.

    “It’s an economy proving to be more resilient than many thought and it’s one that is supported by the prospect of central banks cutting rates, and that’s a great environment for bonds and it’s a great environment for risky assets,” PGIM Principal and Global Investment Strategist Guillermo Felices told CNBC’s “Squawk Box Europe” on Tuesday.

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  • Why the 60-40 portfolio is poised to make a comeback in 2024

    Why the 60-40 portfolio is poised to make a comeback in 2024

    Speculation that the 60-40 portfolio may have outlived its usefulness has been rife on Wall Street after two years of lackluster performance.

    But as the yield on the 10-year Treasury note
    BX:TMUBMUSD10Y
    hovers around 4%, some strategists say the case for allocating a healthy portion of one’s portfolio to bonds hasn’t been this compelling in a long time.

    And with the Federal Reserve penciling three interest-rate cuts next year, investors who seize the opportunity to buy more bonds at current levels could reap rewards for years to come, as waning inflation helps to normalize the relationship between stocks and bonds, restoring bonds’ status as a helpful portfolio hedge during tumultuous times, market strategists and portfolio managers told MarketWatch.

    Add to this is the notion that equity valuations are looking stretched after a stock-market rebound that took many on Wall Street by surprise, and the case for diversification grows even stronger, according to Michael Lebowitz, a portfolio manager at RIA Advisors, who told MarketWatch he has recently increased his allocation to bonds.

    “The biggest difference between 2024 and years past is you can earn 4% on a Treasury bond, which isn’t that far off from the projected return in U.S. stocks right now,” Lebowitz said. “We’re adding bonds to our portfolio because we think yields are going to continue to come down over the next three to six months.”

    See: Case for traditional 60-40 mix of stocks and bonds strengthens amid higher rates, according to Vanguard’s 2024 outlook

    Does 60-40 still make sense?

    Since modern portfolio theory was first developed in the early 1950s, the 60-40 portfolio has been a staple of financial advisers’ advice to their clients.

    The notion that investors should favor diversified portfolios of stocks and bonds is based on a simple principle: bonds’ steady cash flows and tendency to appreciate when stocks are sliding makes them a useful offset for short-term losses in an equity portfolio, helping to mitigate the risks for investors saving for retirement.

    However, market performance since the financial crisis has slowly undermined this notion. The bond-buying programs launched by the Fed and other central banks following the 2008 financial crisis caused bond prices to appreciate, while driving yields to rock-bottom levels, muting total returns relative to stocks.

    At the same time, the flood of easy money helped drive a decadelong equity bull market that began in 2009 and didn’t end until the advent of COVID-19 in early 2020, FactSet data show.

    More recently, bonds failed to offset losses in stocks in 2022. And in 2023, U.S. equity benchmarks such as the S&P 500
    SPX
    have still outperformed U.S. bond-market benchmarks, despite bonds offering their most attractive yields in years, according to Dow Jones Market Data.

    The Bloomberg U.S. Aggregate Total Return Index
    AGG
    has returned 4.6% year-to-date, according to Dow Jones data, compared with a more than 25% return for the S&P 500 when dividends are included.

    But this could be about to change, according to analysts at Deutsche Bank. The team found that, going back decades, the relationship between stocks and bonds has tended to normalize once inflation has slowed to an annual rate of 3% based on the CPI Index.

    DEUTSCHE BANK

    The CPI Index for November had core inflation running at 4% year over year, a level it has been stuck at for the past several months. The Fed’s projections have inflation continuing to wane in 2024.

    Staff economists at the central bank expect the core PCE Price Index, which the Fed prefers to the CPI gauge, to slow to 2.4% by the end of next year. If that comes to pass, investors should see the inverse relationship between stocks and bonds return, according to Lebowitz and others.

    A window of opportunity

    The dismal performance of 60-40 portfolios over the past two years has inspired a wave of Wall Street think pieces questioning whether it still makes sense for contemporary investors.

    A team of academics led by Aizhan Anarkulova at Emory University in November presented findings showing that over a lifetime, investors would have reaped higher returns via a portfolio consisting of 100% exposure to stocks, split between foreign and domestic markets.

    But fixed-income strategists at Deutsche and Goldman Sachs Group, as well as others on Wall Street, say investors wouldn’t be well-served by excluding bonds from their portfolio, particularly with yields at current levels.

    Rob Haworth, senior investment strategy director at U.S. Bank’s wealth-management business, says investors now have an opportunity to lock in attractive returns for decades to come, ensuring that the bonds in their portfolios will, at the very least, deliver a steady stream of income that would reduce any losses in stocks or declines in bond prices.

    There is, however, one catch: with the Fed expected to cut interest rates, that window could quickly close.

    “The problem is, for investors in cash, the Fed’s just told you that is not going to last. I think that means it is time to start thinking about your long-term plan,” Haworth said.

    Read: Fed could be the Grinch who ‘stole’ cash earning 5%. What a Powell pivot means for investors.

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  • Stocks end mostly higher Monday despite resumed U.S. debt selloff

    Stocks end mostly higher Monday despite resumed U.S. debt selloff

    Stocks closed mostly higher to kick off October as a sharp selloff in longer-dated U.S. government debt resumed. The Dow Jones Industrial Average
    DJIA,
    -0.22%
    fell about 74 points, or 0.2%, ending near 33,433, according to preliminary FactSet data. The S&P 500 index
    SPX,
    +0.01%
    ended flat at 4,288, while the Nasdaq Composite Index
    COMP,
    +0.67%
    gained 0.7%. Surging long-term borrowing costs remain a key focus in the final quarter of 2023, with the fear being they could derail the U.S. economy and spark more corporate defaults. The benchmark 10-year Treasury yield was punching higher to about 4.682% on Monday. Evidence of the debt rout could be found in the popular iShares 20+Year Treasury Bond ETF,
    TLT,
    -1.98%
    which cemented its lowest close since since August 2007 and in the iShares Core U.S. Aggregate Bond ETF,
    AGG,
    -0.70%
    which finished at its lowest since October 2008, according to Dow Jones Market Data. Investors in short U.S. government T-bills, however, have been mostly insulated from recent volatility, with yields steady in the 5.5% range, according to TradeWeb data.

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  • How 10-year Treasurys could produce 20% returns, according to UBS

    How 10-year Treasurys could produce 20% returns, according to UBS

    Carnage in the bond market in September could tee up an opportunity for investors to earn big returns on U.S. government debt in a year.

    Owners of 10-year Treasury
    BX:TMUBMUSD10Y
    notes at recent yields of around 4.5% could reap up to 20% in total returns in a year if the U.S. economy stumbles into a recession, according to UBS Global Wealth Management.

    The key would be for U.S. debt to rally significantly as investors scramble for safety in the roughly $25 trillion treasury market.

    “U.S. yields remain well above long-term equilibrium levels, providing scope for them to fall as the macroeconomic outlook becomes more supportive for bonds,” a team led by Solita Marcelli, chief investment officer Americas at UBS Global Wealth Management, wrote in a Friday client note.

    Their base-case call is for the 10-year Treasury yield to fall to 3.5% in 12 months, with it easing back to 4% in an upside scenario for growth, and for the economy’s benchmark rate to tumble as low as 2.75% in a downside scenario of a U.S. recession.

    “That would translate into total returns over the period of 14% in our base case, 10% in our upside economic scenario, and 20% in our downside scenario.”

    See: The market ‘may be overpaying you’ on a 10-year Treasury, says Lloyd Blankfein

    A rally in Treasury debt could help boost funds that track the Treasury market and the broader U.S. bond sector. The popular iShares 20+ Year Treasury Bond ETF
    TLT
    was down 10.9% on the year through Friday, while the iShares Core U.S. Aggregate Bond ETF
    AGG
    was 3% lower, according to FactSet.

    A tug of war has been developing in the Treasury market, with fear gripping investors this week as bond yields spike in the wake of signals last week from the Federal Reserve that interest rates may need to stay higher for longer than many on Wall Street anticipated.

    “Bond vigilantes” unhappy about the U.S. deficit have been demanding higher yields, while households and hedge funds have been piling into Treasury securities since the Fed began raising rates in 2022.

    Much hinges on how painful things get if rates stay high, which would ratchet up borrowing costs for households, companies and the U.S. government as the Fed works to get falling inflation down to its 2% target.

    Hedge-fund billionaire Bill Ackman this week said he thinks Treasury yields are going higher in a hurry, as part of his bet that the 30-year Treasury yield
    BX:TMUBMUSD30Y
    has more room to climb.

    The 10-year Treasury edged lower to 4.572% on Friday, after adding almost 50 basis points in September, which helped the stock market reclaim some lost ground in a dismal month, while the 30-year Treasury yield pulled back to 4.709%, according to FactSet.

    The Dow Jones Industrial Average
    DJIA
    posted a 3.5% decline in September, its biggest monthly loss since February, the S&P 500 index
    SPX
    fell 4.8% and the Nasdaq Composite Index
    COMP
    shed 5.8% for the month.

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  • Investors parked heavy in cash may be making a ‘mistake’, Nuveen says

    Investors parked heavy in cash may be making a ‘mistake’, Nuveen says

    Investors sitting on the sidelines in cash and in money-market funds might consider moving into longer-dated bonds sooner rather than later, according to Saira Malik, chief investment officer at Nuveen.

    As look at historical returns shows the broader $55 trillion U.S. bond market typically outperforms short-term Treasurys at the end of past Federal Reserve rate hiking cycles since the 1990s.

    The bond market produced an average 5.5% three-month rolling return following the last rate hike (see chart) in the past four Fed hiking cycles, while short-term Treasurys returned 2.1%.

    This data includes the three-month rolling average performance of bonds in all Federal Reserve rate-hiking cycles since 1990 (1995, 2000, 2006 and 2018) based on the Bloomberg U.S. Aggregate Bond Index and the Bloomberg U.S. Treasury 1-3 Year Index


    Bloomberg, Nuveen

    Of note, the magnitude of the bond market’s outperformance faded by 12 months versus short-term positions, when looking at the Bloomberg U.S. Aggregate Bond Index’s performance relative to the Bloomberg U.S. Treasury 1-3 Year Index.

    “The broad market typically experienced a strong relief rally immediately after the Fed pause and mostly outperformed the following year,” Malik said, in a Monday client note. “This lends further credence to our view that overallocating to cash or short-term government debt could be a mistake — and that investors may want to start closing their duration underweights.”

    Individuals can gain exposure to Wall Street bond indexes through related exchange-traded funds, including the iShares Core U.S. Aggregate Bond ETF
    AGG
    and the SPDR Bloomberg 1-3 Year U.S. Treasury Bond UCITS ETF
    UK:TSY3
    for short-term Treasury exposure.

    Fed Chairman Jerome Powell signaled on Friday that additional rate hikes might be needed to keep the U.S. cost of living in retreat, even though rates already sit at a 22-year high and inflation has fallen sharply in the past year, while speaking at the annual Jackson Hole gathering in Wyoming. He also reiterated a vow to keep rates at a restrictive level for a while to keep inflation in check.

    Malik pointed to cooling housing inflation as a positive sign on the inflation front. Home buyers have pulling back as the benchmark 30-year mortgage rate hit an average of 7.31%, the highest levels since 2000.

    She also expects U.S. economic growth to slow and a “partial retracing” of the 10-year Treasury yield
    BX:TMUBMUSD10Y,
    following its surge in recent weeks.

    “Historically, the 10-year yield has peaked within the last few months of the final rate hike in a tightening cycle. We expect this hike will occur at either the September or November Fed meeting, and that the 10-year yield will decline through year-end.” Yields and debt prices move opposite each other.

    Related: Pimco emerges as a buyer in Treasury market selloff, says Bond Vigilante theme ‘a bit extreme’

    Stocks were higher Monday, with the Dow Jones Industrial Average
    DJIA
    up 0.5%, the S&P 500 index
    SPX
    0.3% higher and the Nasdaq Composite Index
    COMP
    up 0.4%, according to FactSet.

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  • Treasury yields little changed as focus remains on economic outlook, earnings

    Treasury yields little changed as focus remains on economic outlook, earnings

    John Zich | Bloomberg | Getty Images

    U.S. Treasury yields were little changed on Tuesday, as investors continued to assess the outlook for the U.S. economy and digested the latest round of corporate earnings.

    As of around 2:20 a.m. ET, the yield on the benchmark 10-year Treasury note was fractionally higher at 3.5946% while the yield on the 30-year Treasury bond also nudged marginally upwards to 3.8080%. Yields move inversely to prices.

    Corporate earnings season dominates this week’s agenda, with giants Johnson & Johnson, Bank of America and Goldman Sachs all set to report before the opening bell on Wall Street on Tuesday.

    On the data front, traders will have an eye on the March housing starts and building permits figures due at 8:30 a.m. ET. Housing starts for the month are expected to have fallen by 3.4% to 1.40 million units, according to Dow Jones consensus estimates, while building permits are projected to drop by 4.9% to 1.45 million units.

    Markets are closely following economic data for a read on where the Federal Reserve might take interest rates at its next meeting in early May. More than 84% of traders are calling a 25 basis point hike at the next policy meeting, according to CME Group’s FedWatch tool.

    An auction will be held Tuesday for $34 billion of 52-week Treasury bills.

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