|Bid||58.01 x 800|
|Ask||58.03 x 1000|
|Day's Range||57.84 - 58.43|
|52 Week Range||52.57 - 59.86|
|PE Ratio (TTM)||N/A|
|YTD Daily Total Return||2.16%|
|Beta (5Y Monthly)||0.91|
|Expense Ratio (net)||0.05%|
For investors looking to build a proper bond portfolio, they can look at ETFs that have earned Morningstar’s Gold rating. "Be sure to start building your bond-fund portfolio with core, intermediate-term funds that give you a lot of diversification in a single holding," said Morningstar director of personal finance Christine Benz. "Fixed Income Instruments" include bonds, debt securities and other similar instruments issued by various U.S. and non-U.S. public- or private-sector entities.
Market expectations for inflation have increased lately on upbeat October consumer inflation data, global policy easing including by the Fed, a soaring stock market and easing recessionary fears.
Investor appetite for bonds doesn’t seem to be letting up anytime soon and as the “recession” word keeps popping up in the financial markets, it will continue this way for quite some time. For investors looking to build a proper bond portfolio, they can look at ETFs that have earned Morningstar’s Gold rating.
In today’s bond market, yield is getting harder to come by, but investors can still use bonds strategically as either a safety mechanism when markets get volatile or a relatively stable source of income. Morningstar released a list of bond funds that included three exchange-traded funds (ETFs) that investors can look at. “Investors rely on bonds for many reasons: funding short-term goals, providing ballast to an equity-heavy portfolio, or generating much-needed income during retirement, to name a few,” wrote Morningstar’s Susan Dziubinski.
What are the countries with the highest inflation rates in the world? Inflation is one of the indicators of a country’s economic state, representing a percentage change in the general level of prices for goods and services paid by consumers (for consumer price index) and producers (for producer price index). A higher inflation rate means lower […]
Investment company Adventist Health System Sunbelt Healthcare Corp (Current Portfolio) buys Schwab U.S. Continue reading...
Tax refunds are a hotly debated topic. Many investors like them as a forced savings plan. Others recognize that your tax refund is an interest-free loan to the government. If you get a big tax refund, that means that the government has kept your money for the year and paid you zero interest!Source: Shutterstock As of Feb. 8, the IRS had processed 26.9 million individual tax returns and calculated the average refund at $1,949, a decline from last years $2,135 average refund for the same period.Had you invested that money in a high yield savings account or CD last year and earned 2.25% interest, you would have earned roughly $50. Not a fortune, but enough for a nice dinner out or a small shopping trip to the mall.InvestorPlace - Stock Market News, Stock Advice & Trading TipsYet, the best way to invest your tax refund might come as a surprise. Invest Your Tax Refund in Series I Savings BondsI Bonds, issued by the U.S. Government are an underappreciated asset class. Not only are they among the safest investments, these inflation-protected savings vehicles are also free from state and local taxes. * 10 Cheap Stocks to Buy Now I Bonds are so coveted that the government only allows individuals to purchase up to $10,000 worth in a calendar year … except, if you purchase them with your tax refund. You're entitled to buy an additional $5,000 with your tax refund each year, in addition to the initial $10,000.You won't hear of I bonds from your financial advisor because they are offered commission free. Why Invest in I Bonds?For diversification, investors need fixed, bond investments as well as higher-yielding stocks in their investment portfolios. As inflation increases, investors need their cash to keep up. If inflation rises to 3% and your cash account pays 2%, you're losing 1% purchasing power.Series I Savings Bonds solve the problem of rising inflation stealing your cash purchasing power.Purchased directly from TreasuryDirect.gov I bonds can be bought in multiple denominations from $25 to $10,000 for an electronic bond. Paper I bonds can be purchased in $50, $100, $200, $500 and $1,000 denominations. I bonds can even be purchased through your employer's payroll deduction plan.The I Bonds interest payments are a combination of a fixed interest rate, determined at purchase and a variable inflation adjusted interest rate that changes twice per year. The variable inflation rate is based on changes in the nonseasonally adjusted Consumer Price Index for all Urban Consumer (CPI-U).The current composite interest rate for Ibonds issued from November 1, 2018 through April 30, 2019 was 2.83%. This rate includes the fixed rate of 0.50%, that continues for the life of the bond and the variable semiannual inflation rate of 1.16%. Your bond interest rate changes dependent upon the month the bond is purchased.Although the interest is earned monthly and compounded semiannually, both interest and principal are paid when the bond is redeemed.I bonds earn interest for 30 years, unless you cash them in earlier. You're required to own the bonds for at least one year, and if they're redeemed before five years, you forfeit the previous three months of interest. I Bond Bonus BenefitsIn addition to the inflation protection benefit and safety, there are other reasons to invest in I bonds.Investors can redeem I bonds to pay for qualified higher education expenses for an eligible institution, tax-free. That means the interest payments are excluded from state and local taxes as well as federal taxation. This makes I bonds an ideal savings vehicle, for qualified investors to pay college expenses coming due within the next few years.I bonds can also be given as gifts, complete with a gift certificate for the recipient. Easier Ways to Invest in I Bonds and Inflation Protected SecuritiesAlthough opening a TreasuryDirect.gov account is easy, some investors prefer the simplicity of investing in ETFS or mutual funds.Inflation-protected bond funds also include another government bond product, TIPs or Treasury Inflation-Protected Securities. These are marketable bonds whose principal adjusts along with changes in the Consumer Price index. The fixed interest rate is paid on the adjusted principal value of the bonds. TIPs and I bonds have the same goal, protecting your capital from loss of principal due to inflation. While TIPS can also be purchased on the TreasuryDirect.gov website, they are popular holdings within inflation-protected funds.Inflation-protected bond funds are another investment route for your tax refund. The Vanguard Short-Term Inflation-Protected Securities ETF (NASDAQ:VTIP) has a year-to-date return of 1.86% as of April 24, 2019 and a low 0.1% expense ratio. For a longer-duration inflation-protected bond fund, the FlexShares iBoxx 5-Year Target Duration TIPs Index Fund (NYSEARCA:TDTF) has a year-to-date return of 2.96% and a 0.20% expense ratio. Even digital investment advisors such as the Ellevest robo-advisor see the merit in inflation protected investments and offer Schwab's US TIPS bond fund (NYSEARCA:SCHP) in their investment mix.To preserve your capital, inflation-protected fixed income investments are a great place for your tax refund.Barbara A. Friedberg, MBA, MS is a veteran portfolio manager, expert investor, and former university finance instructor. She is editor/author of Personal Finance; An Encyclopedia of Modern Money Management and two additional money books. She is CEO of Robo-Advisor Pros.com, a robo-advisor review and information website. Additionally, Friedberg is publisher of the well-regarded investment website Barbara Friedberg Personal Finance.com. Follow her on twitter @barbfriedberg and @roboadvisorpros. As of this writing, she does own both I bonds and an inflation protected ETF. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The 10 Best Stocks to Buy for May * 7 Stocks Worth Buying When They're Down * 7 of the Best ETFs to Buy for a Slowing Economy Compare Brokers The post The Best Way to Invest Your Tax Refund -- You Might be Surprised appeared first on InvestorPlace.
Since launching its first ETF in 2009, Charles Schwab Investment Management has seen rapid growth to become the fifth biggest U.S. ETF provider. Here's how.
Exchange-traded funds (ETFs) had an incredible year in 2017. A recent report by ETF.com indicates that ETFs gathered new assets totaling more than $450 billion for that year, in some part thanks to the strength of the U.S. equity space. In 2018, although ETFs are still among the hottest and most popular investment vehicles for investors across the country, the figures are likely to be somewhat less impressive.
Consumer prices in the United States grew 2.8% year over year in May 2018, above market expectations of 2.7%. It also marked the highest inflation rate since February 2012. Higher cost of gasoline and shelter led to the estimate beat.
With interest rates on the rise, bond values, REITs and dividend-paying stocks have all been pressured lower as a means of adjusting for the prevailing interest rates of the day. It’s one reason why Treasury Inflation-Protected Securities, or TIPS for short is worth a look. Another reason is that, with the inflation outlook being largely uncertain there’s no end in sight to the frustration.
Bond ETFs are experiencing a lot of action as fixed-income investors move around billions of dollars. Over the past week, there have been a handful of exceptionally large trades that are worth mentioning, ...
As fixed-income investors looked backed into Treasury exposure, some bond investors are taking a shine to a Treasury inflation protected securities-related exchange traded fund to generate yield generation and hedge against potential inflationary risks in a growing economic environment. The Schwab U.S. TIPS (SCHP) was the most popular ETF of the past week, attracting $1.2 billion in net inflows, according to XTF data. The rush toward Treasuries and TIPS may be attributed to the sudden risk-off nature in response to Eurozone risks, namely Italy's recent election results and rising anti-establishment or anti-euro sentiment that has fueled speculation of a potential dissolution of the euro currency bloc.
The FOMC’s May meeting minutes indicated that some of its members had turned bearish on inflation (TIP). This information played a major role in changing investor’s assessment of the Fed’s plan for future rate hikes. If members feel that inflation can’t sustain above 2%, there’s the chance that they could limit the number of rate hikes going forward.
US bond market investors were relieved after the US Bureau of Labor Statistics’ April report, published May 10, indicated a lower-than-expected inflation growth rate. The latest inflation (VTIP) report indicated that core inflation increased at a slower pace of 0.1% in April, boosting hopes for a slower pace of rate hikes from the Fed. At its May meeting, the Fed stated that it would continue tightening and inflation (TDTT) would reach 2% in future months. The decline in bond yields after the disappointing jobs and inflation reports could be temporary, as inflation expectations may be fueled by higher crude prices.
On May 10, the Bureau of Labor Statistics reported that US consumer prices rose 0.2% in April. In contrast, they fell 0.1% in March. The April growth kept the uptrend in inflation (TIP) growth intact. Over the last 12 months, US inflation has grown 2.5%, a steep increase from the 1.6% growth recorded in June 2017. Core inflation (VTIP), which excludes volatile food and energy prices, rose just 0.1%, the slowest growth since November 2017. Over the last 12 months, core inflation has grown 2.1%, above the 2% target rate set by the Fed.
In the May FOMC meeting, the US Federal Reserve observed that economic activity has been rising at a moderate pace. This trend was in line with the projections laid out in the summary of economic projections report released at its March meeting. In its most recent SEP release, the Fed upgraded its GDP growth outlook for 2018 by 0.2% to 2.7%, compared to the 2.5% growth outlook in December 2017 and a 2.1% forecast in September 2017.
The Bureau of Economic Analysis defines PCE (personal consumption expenditure) as the value of goods and services purchased by, or on behalf of, US residents. The Fed prefers this inflation (CPI) measure to assess price levels, as it reflects actual price increases for consumers.
The primary reason cited by the FOMC (Federal Open Market Committee) for holding off on interest rate hikes since 2016 was lagging inflation growth. Whenever the Fed signaled rate hikes, the yield curve flattened since investors were not convinced that inflation (TIP) growth would pick up the pace, which would limit the Fed’s ability to raise rates. The Fed has set a target of 2% inflation (VTIP) growth, at which point the economy is expected to be running at a normal pace.
The Bureau of Labor Statistics (or BLS) released the “Job Openings and Labor Turnover Survey” (or JOLTS) data for February on April 13. The data for this survey is collected by a monthly survey on job openings, the number of new employees hired, the number of employees who have quit, the number of employees asked to leave, and other job separations. The JOLTS report is an indication of the demand for workers in the United States.
The most recent inflation (VTIP) report indicated that core inflation moved closer to the Fed’s 2% target, which could translate into further rate hikes from the central bank. At its recent meeting, the Fed clearly stated that it would continue tightening if supported by economic data. If interest rates and inflation (SCHP) start rising, bond (BND) yields could rise in response and bond prices could fall. US bond yields were largely unaffected by the inflation report favoring higher rates.
On April 11, market participants expected a volatile session after the US inflation report, but, to their surprise, Donald Trump’s tweet earlier in the day about Syria and missiles pushed markets lower. Had there not been any geopolitical tensions, the market reaction could have been negative despite the lower headline number. A faster pace of rate hikes from the Fed may have contributed to the market performance that day. The Fed has been increasing interest (SCHP) rates at a slower pace in the last two years despite employment picking up, citing low inflation as the reason for its slower pace.