With the bear having clawed out a huge piece of stock market profits lately, investors have been pouring money into short-term bond ETFs.
Elevated equity market volatility in October had investors seeking refuge in short-term Treasuries and the related exchange traded funds, including the SPDR Barclays 1-3 Month T-Bill (BIL) . BIL tracks the Bloomberg Barclays 1-3 Month U.S. Treasury Bill Index and "seeks to provide exposure to zero coupon U.S. Treasury securities that have a remaining maturity of 1-3 months," according to State Street Global Advisors (SSgA). "The SPDR Bloomberg Barclays 1-3 Month T-Bill ETF, ticker BIL, had the largest inflow since 2011 on Monday, with $581 million coming in.
With interest rates rising, some fixed income investors are seeking refuge with ultra-short term Treasury exchange traded funds. Popular destinations on that front include the SPDR Barclays 1-3 Month T-Bill (BIL) and the Goldman Sachs Treasury Access 0-1 Year ETF (NYSEArca: GBIL) . GBIL, which is two years old, looks to reflect the performance of the Citi US Treasury 0-1 Year Composite Select Index, which is comprised of U.S. Treasury Obligations with a maximum remaining maturity of 12 months.
This short-term bond ETF hits a new 52-week high. Are more gains in store for this ETF?
Investors piled into fixed income exchange traded funds last month, focusing on short duration fare such as the iShares Short Treasury Bond ETF (SHV) . The Federal Reserve raised interest rates in March and many bond market observers are pricing in as many as four rate hikes this year, prompting investors to embrace funds with lower rate risk. Another $1.7 billion has gone into two similar ETFs from Goldman Sachs Group Inc. and State Street," reports The Wall Street Journal.