iShares 3-7 Year Treasury Bond ETFの空売り状況は、投資家がiShares 3-7 Year Treasury Bond ETFの株価下落に賭けている度合いを知ることができます。空売りデータは2週間ごとに更新されます。

iShares 3-7 Year Treasury Bond ETF (NASDAQ:IEI), 空売り情報

iShares 3-7 Year Treasury Bond ETF

The Fund seeks to track the investment results of the ICE U.S. Treasury 3-7 Year Bond Index (the Underlying Index), which measures the performance of public obligations of the U.S. Treasury that have a remaining maturity of greater than or equal to three years and less than seven years. As of February 29, 2024, there were 96 issues in the Underlying Index. The Underlying Index consists of publicly issued U.S. Treasury securities that have a remaining maturity of greater than or equal to three years and less than seven years and have $300 million or more of outstanding face value, excluding amounts held by the Federal Reserve System. In addition, the securities in the Underlying Index must be fixed rate and denominated in U.S. dollars. Excluded from the Underlying Index are inflation-linked securities, Treasury bills, cash management bills, any government agency debt issued with or without a government guarantee and zero-coupon issues that have been stripped from coupon-paying bonds. The Underlying Index is market value weighted, and the securities in the Underlying Index are updated on the last business day of each month.

Fears of the end of the U.S. exceptionalism trade have triggered a rare, simultaneous selloff across stocks, Treasuries and the dollar in recent weeks, as concerns over tariffs and the politicization of the Federal Reserve under President Donald <a href="https://www.benzinga.com/topic/donald-trump">Trump continue to mount.</a>
Since Trump's self-declared "Liberation Day" on April 2, when he unveiled sweeping "reciprocal tariffs" on U.S. trading partners, the market reaction has been swift and broadly negative. U.S. government bonds, traditionally a refuge during equity volatility, have failed to provide a safe haven.
<h3 class="wp-block-heading">The Trump-Powell Tension Behind The Market Unwind</h3>
Market fragility was further exposed by Trump&#8217;s open attacks on Fed Chair Jerome Powell. 
First, he wrote last week on Truth Social, "Jerome Powell is always too late and wrong. His termination cannot come fast enough." 
Then, during a press conference with Italy's Giorgia Meloni, he pushed the issue further: "If I want him out. He&#8217;ll be out of there real fast. Believe me."
Confirmation from National Economic Council Director Kevin Hassett that the administration is "considering" removing Powell before his term ends in 2026, also added fuel to the fire.
On Monday, the Trump-Powell drama escalated again, sending shockwaves across currency markets, where central bank independence is viewed as a cornerstone of stability.
Trump posted on Truth Social, pushing for "preemptive" interest rate cuts. He wrote that with energy costs and food prices falling — sarcastically referencing Biden's "egg disaster" — inflation was virtually gone. The president warned of a slowing economy unless Powell, whom he labeled a "major loser," acted immediately.
He further accused Powell of political bias during the previous election cycle, claiming the Fed Chair only cut rates to help former President Joe Biden and later Vice President Kamala Harris win the White House.
Betting markets currently assign a 23% chance on Powell no longer serving as Fed Chair by the end of the year. 
<iframe loading="lazy" src="https://kalshi.com/external-widgets/events/LEAVEPOWELL-25/markets/LEAVEPOWELL-25-DEC31?color_scheme=light&#038;widget_size=large&#038;utm_campaign=benzinga_widget" width="552px" height="400px" style="border:0"></iframe>
<h3 class="wp-block-heading">Triple Threat: Stocks, Bonds, Dollar All Down</h3>
The market has responded decisively. Since April 2, 2025:
<ul>
<li>The iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) has dropped more than 6%</li>
<li>The Invesco DB USD Index Bullish Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UUP#NYSE">UUP</a>), tracking the dollar index, has fallen 5.8%</li>
<li>The SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) has tumbled over 8%</li>
</ul>
This rare triple selloff challenges a foundational assumption: that Treasuries typically gain when risk assets fall. 
The breakdown of this historical inverse correlation has led many to wonder: Are investors abandoning Treasuries?
<h2 class="wp-block-heading">What the Official Data Shows, And What It Doesn't</h2>
The latest U.S. Treasury International Capital (TIC) data, covering February, doesn&#8217;t show large-scale foreign divestment. 
According to Goldman Sachs, foreign investors actually net purchased long-term U.S. securities in February, including Treasuries, equities and corporate bonds.
Agency securities saw some selling, but overall the data point to continued interest from global buyers—even as market volatility ramps up.
That said, February is now outdated. 
With April&#8217;s turbulence unfolding post-TIC cutoff, the latest exchange-traded fund flows could offer more immediate clues about investor behavior.
<h3 class="wp-block-heading">ETF Flows Reveal a More Nuanced Picture</h3>
According to data from ETFDB.com through April 18, there's no evidence of broad-based exodus from Treasury ETFs. 
Despite some rotation out of long-duration ETFs like TLT and Vanguard Extended Duration Treasury ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EDV#NYSE">EDV</a>), short- and mid-duration Treasury ETFs have attracted strong inflows during the month. 
<figure class="wp-block-table is-style-stripes"> 
<table>
<thead>
<tr>
<th>ETF Name </th>
<th>April Flows</th>
<th>Trend Insight</th>
</tr>
</thead>
<tbody>
<tr>
<td>iShares 20+ Year Treasury Bond ETF </td>
<td>-$2.85 billion</td>
<td>Outflows have outweighed inflows since September 2024. </td>
</tr>
<tr>
<td>Vanguard Extended Duration Treasury ETF</td>
<td>-$385 million</td>
<td>Worst monthly outflow since data began in 2015</td>
</tr>
<tr>
<td>iShares U.S. Treasury Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GOVT#NYSE">GOVT</a>)</td>
<td>+$78 million</td>
<td>Modest recovery after March's $2.95 billion outflow</td>
</tr>
<tr>
<td>iShares 1-3 Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SHY#NASDAQ">SHY</a>)</td>
<td>+$1.2 billion</td>
<td></td>
</tr>
<tr>
<td>iShares 3-7 Year Treasury Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IEI#NYSE">IEI</a>)</td>
<td>+$897 million</td>
<td>Highest inflows since July 2022</td>
</tr>
<tr>
<td>iShares Short Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SHV#NASDAQ">SHV</a>)</td>
<td>+$2.94 billion</td>
<td>Best month since February 2023</td>
</tr>
<tr>
<td>iShares 7-10 Year Treasury Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IEF#NYSE">IEF</a>)</td>
<td>+$230 million</td>
<td>Four straight months of inflows</td>
</tr>
<tr>
<td>Vanguard Intermediate-Term Treasury ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/VGIT#NASDAQ">VGIT</a>)</td>
<td>+$770 million</td>
<td>Strongest inflows since June 2024</td>
</tr>
<tr>
<td>Vanguard Short-Term Treasury ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/VGSH#NASDAQ">VGSH</a>)</td>
<td>+$505 million</td>
<td>On pace for fourth straight positive month</td>
</tr>
<tr>
<td>PIMCO 25+ Year Zero Coupon U.S. Treasury ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ZROZ#NYSE">ZROZ</a>)</td>
<td>+$3.55 million</td>
<td>Minimal activity; flows remain stagnant since October 2024</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">Data as of April 18, 2025</figcaption></figure>
<h3 class="wp-block-heading">What About China?</h3>
There's also speculation that major foreign holders, especially China, could be reducing exposure to U.S. government debt in retaliation for tariffs. 
Yet, Goldman Sachs analysts see little evidence of that.
They indicated the recent dislocations are "more likely related to position unwinds by levered investors than significant real money (domestic or international) selling," a view also recently expressed by <a href="https://www.benzinga.com/topic/scott-bessent">U.S. Treasury Secretary Scott Bessent</a> during a Bloomberg interview. 
As Goldman highlighted, the dollar/yuan exchange rate behavior does not support the idea of major Chinese repatriation—
if Beijing were dumping Treasuries, USD/CNY would likely face sharp downward pressure, but the opposite has happened.
<h3 class="wp-block-heading">No Sign Of A Treasury Crisis, Yet</h3>
The bottom line: while some repositioning out of longer-dated Treasuries has been repositioned, ETF flows suggest no broad investor flight from the Treasury market.
If anything, there is a tilt toward shorter maturities, likely reflecting a desire to hedge against both rate volatility and political uncertainty.
Until more recent TIC data is available in June, ETF flows remain the best window into investor sentiment and so far, they suggest the panic narrative may be premature.
Now Read: 
<ul>
<li><a href="https://www.benzinga.com/news/25/04/44886209/if-you-had-bet-on-gold-after-the-1971-nixon-shock-youd-have-beaten-the-sp-500-unless-you-did-this-one-thing">If You Had Bet On Gold After The 1971 Nixon Shock, You&#8217;d Have Beaten The S&amp;P 500 — Unless You Did This One Thing</a></li>
</ul>
Image: Shutterstock

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ZROZ

Are Investors Selling US Treasuries As Trump Attacks Powell? Here's What Latest ETF Flows Tell You

The market just slipped through what JPMorgan&#8217;s Jason Hunter calls a "fork in the road" — only this time, it&#8217;s more like tumbling through a black hole. Hunter says the recent U.S. trade policy surprise pushed <a href="https://www.benzinga.com/topic/s-p-500">the S&amp;P 500</a> index below a critical level near 5500, triggering what could be an accelerated pricing of recession risks.
<h1 class="wp-block-heading">Key Support Breached – Now What?</h1>
Hunter highlights that the S&amp;P 500 didn't just tiptoe past support — it gapped straight through 5500, dipped through the mid-5300s and now hovers near a major support zone in the low 5100s.
He believes a bounce is possible from here, but don't bet the house on it. "We suspect the market can stage a bear market rebound&#8230; but believe that lift will be contained and potentially short-lived unless the news flow sees a dramatic change," he warns.
Read Also: <a href="https://www.benzinga.com/markets/equities/25/04/44660697/how-to-protect-against-a-1987-style-s-p-500-crash-scenario">How to Protect Against A 1987-Style S&amp;P 500 Crash Scenario</a>
<h1 class="wp-block-heading">The Yield Curve Has Its Own Drama</h1>
In the bond world, the 2-year Treasury note flirted with resistance at 3.48%-3.55% before backing off. Hunter now sees a ceiling at 3.825%-3.85%, but expects an eventual bullish breakout — translation: yields may start rising again soon.
<h1 class="wp-block-heading">How To Play It</h1>
For those looking to trade this technical twist, ETFs like the SPDR S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), which tracks the S&amp;P 500, or the ProShares UltraShort S&amp;P500 (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SDS#NYSE">SDS</a>), leveraged inverse ETF for the S&amp;P 500, offer exposure. If you're watching yields, the iShares 1-3 Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SHY#NASDAQ">SHY</a>), a 1–3 Year Treasury ETF, or the iShares 3-7 Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/IEI#NASDAQ">IEI</a>), a 3–7 Year Treasury ETF, could be in focus.
The bottom line? 
The S&amp;P 500 just slipped past a critical technical threshold, and while a short bounce may lure some in, Hunter's charts are flashing caution. Don&#8217;t mistake this for a reset — it&#8217;s more likely the eye of the storm.
Read Next: 
<ul>
<li><a href="https://www.benzinga.com/news/econ-s/25/04/44669291/sp-500-officially-sinks-into-bear-market-heres-what-investors-need-to-know">S&amp;P 500 Officially Sinks Into Bear Market: Here&#8217;s What Investors Need To Know</a></li>
</ul>
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ETFs

S&P 500 Slips Through The Cracks, Analyst Spots Short-Lived Bounce Before Gravity Kicks In

The cost of managing U.S. government debt has seen a significant rise of 25% in the first nine months of the fiscal year, hitting $652 billion and consequently <a href="https://www.benzinga.com/topic/janet-yellen">exacerbating the federal deficit.</a>
The federal deficit reached a staggering $1.39 trillion for the nine months through June, according to Treasury Department data. This represents a dramatic 170% increase when compared to the same period last year, Bloomberg reports.
Political Tussles On The Horizon
The expanding deficit could potentially feed into the Republican legislative agenda to slash federal spending, according to <a href="https://www.bloomberg.com/news/articles/2023-07-13/us-racks-up-652-billion-in-interest-costs-as-higher-rates-bite?srnd=premium&amp;sref=TBDibEcD">the</a> Thursday report. 
While an agreement was reached between the GOP, which holds power in the House, and the Biden administration to suspend the debt limit earlier in June, a renewed clash is expected over appropriations for the 2024 fiscal year commencing Oct. 1.
Also Read: <a href="URL3">Producer Inflation Falls To 35-Month Low; Jobless Claims Rise Less Than Expected</a>
Interest Rates As A Key Determinant
The rise in interest rates has played a pivotal role in driving the deficit.
Five-year Treasury yields stand at about 3.96%, in contrast to 1.35% at the commencement of last year. As securities with lower yields mature, the Treasury is set to face a continuous rise in the rates it pays on outstanding debt.
By the end of June, the weighted average interest on total outstanding debt was 2.76%, a figure that has not been exceeded since January 2012. This marks an increase from the 1.8% noted a year ago.
The value of US Treasury bonds maturing in the next three to seven years, as monitored by the iShares 3-7 Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/IEI#NASDAQ">IEI</a>), is 10% lower than it was at the beginning of 2022.
The Revenue Aspect
Despite concerns regarding higher rates, Treasury Secretary Janet Yellen has downplayed these worries. She has rather highlighted that the ratio of interest payments to GDP, after accounting for inflation, remains at a historically low level.
One crucial factor that has contributed to the expanding deficit this year has been a dip in Treasury revenues, particularly due to a drop in the capital gains tax collection. The downturn in stocks, bonds and other assets last year meant fewer government receipts.
Inflation has also played a role in amplifying a variety of government expenditure items.
Now Read: <a href="https://www.benzinga.com/news/23/07/33221432/change-in-the-hawks-nest-st-louis-fed-president-james-bullard-announces-unexpected-resignation">Change In The Hawks&#8217; Nest: St. Louis Fed President James Bullard Announces Unexpected Resignatio</a>n
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo: Shutterstock.

News

Federal Deficit Widens 170% From 2022, Setting The Stage For Political Rumble

<a href="https://www.treasurydirect.gov/instit/annceresult/press/preanre/2015/R_20150826_2.pdf" title="https://www.treasurydirect.gov/instit/annceresult/press/preanre/2015/R_20150826_2.pdf">https://www.treasurydirect.gov/instit/annceresult/press/preanre/2015/R_20150826_2.pdf</a>

Markets

US Treasury 5-Year Note Auction Sees Largest Bidding From Primary Dealers Since January 2014, Least Indirect Bidders Since Oct 2014, Most Direct Bidders Since May 2014

After hearing comments from <a href="http://www.benzinga.com/topic/janet-yellen">Chairwoman Yellen</a> last week in <a href="http://www.benzinga.com/topic/jackson-hole">Jackson Hole</a>, pundits generally agree sentiment is growing for a ‘sooner than later' Fed funds rate hike.
 As the S&amp;P 500 crosses the 2,000 mark, unemployment continues to get closer to the six percent level, and the rate of economic growth accelerates, pressure seems to be building for some type of Fed funds rate increase within the next six months. 

Regardless if the first hike comes in a month or more than a year from now, the more important question to ask is ‘once initiated how quickly will the rise be and to what level will it top-off?' 
Given the Fed's record to date, it's plausible that a hike would be very gradual and stop in the two percent to 2.5 percent range. If this proves to be correct an investor should consider making these moves:
Related Link: <a href="http://www.benzinga.com/general/education/14/08/4787550/is-it-time-to-sell-out-of-longer-term-municipal-bonds">Is It Time To Sell Out Of Longer Term Municipal Bonds?</a>
<h3>Leave Some Exposure To Long Maturity Bonds</h3>
 This might seem somewhat counterintuitive, as many times in the past an automatic portfolio move would have been to cut all exposure to long term bonds ahead of rate hike cycle. However, if the ‘final destination' for the rate is two percent to 2.5 percent and it will take a couple years to get there, this allocation is prudent. 
While some selective trimming could still make sense, long term rates most likely will be low for a very long time making long bonds preferable over short. In addition, the Fed rate hikes will tend to directly affect short and intermediate bonds more, making these a little more vulnerable on a relative basis to the yield they offer. 
<h3> Limit Or Trim Exposure To Short/Intermediate Term Bonds</h3>
 Even though these bonds seldom hurt an investor to any large degree, at this point they most likely offer nominal or even slightly negative returns for the next couple years.
 ETFs in this space include iShares 3-7 Year Treasury Fund (NYSE: <a class="ticker" href="/stock/iei#NYSE">IEI</a>) and iShares 1-3 Year Credit Fund (NYSE: <a class="ticker" href="/stock/csj#NYSE">CSJ</a>). The yields on these bonds are one percent to two percent or less, and once to a two year bond they slip to 0.5 percent per year. These ultra-low current yields (especially in the three year or shorter range) and the likelihood of rising short term rates over the next two years combine to make any material exposure to this section of the bond market unadvisable.
The rising Fed fund rate will tend to affect these bonds more, and that along with paltry current yields will most likely result in near zero returns for the next couple of years. Investors would most likely be better off in long term bonds where the rate increase will have a muted affect and there is more current yield to be had.
<h3>Trim Real Estate</h3>

Real estate has had a great run in 2014 after a lackluster 2013. The REIT index (represented by Vangaurd's REIT Fund (NYSE: <a class="ticker" href="/stock/vnq#NYSE">VNQ</a>), is up almost 20 percent! This gain is mostly due to this year's decrease in interest rates. 2013 exposed the real estate sector as particularly vulnerable to interest rate increases. 
The combination of historically low current yields (around 3.5 percent), high valuation, and the likelihood of rising interest rates over the next few years makes this asset class particularly exposed. Investors would be wise to trim, take profits, and redeploy elsewhere. 
<h3>Trim Interest Rate Sensitive Equities; Redeploy To Select Cyclical Sectors And Emerging Markets</h3>

 Interest rate sensitive stocks like high dividend payers and especially utilities have also run nicely in 2014, and with valuations stretched (especially on the utility shares) investors should consider taking some profits.
Like real estate, these stocks proved sensitive to interest rate rises in 2013, so if interest rates will be rising (making the yields on these investments less attractive) investors should trim before the first hikes. One example for a trim would be Sector SPDR Utility Fund (NYSE: <a class="ticker" href="/stock/xlu#NYSE">XLU</a>).
 Other areas that might be worthy for a deployment of assets would be technology, such as the SPDR Technology Fund (NYSE: <a class="ticker" href="/stock/xlk#NYSE">XLK</a>) and emerging markets, such as the Vanguard Emerging Market Index Fund (NYSE: <a class="ticker" href="/stock/vwo#NYSE">VWO</a>). 
Eric Mancini is the Director of Investment Research at Traphagen Financial Group (<a href="http://www.tfgllc.com" title="www.tfgllc.com">www.tfgllc.com</a>), an independent investment advisory firm located in northern New Jersey.

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4 Moves To Consider Making Before The Fed Finally Raises Rates

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<div style="text-align: justify;">By <a href="http://www.econmatters.com/search/label/Prieur" target="_blank">Prieur du Plessis</a></div>
<div style="text-align: justify;">
“A number of technical indicators have been very helpful in timing the end of prior corrective phases when cyclical equity conditions were still generally constructive, i.e. a sustainable, low inflation global economic expansion and the absence of significantly overvalued conditions,” BCA Research said on Thursday, May 26, “Currently, these indicators suggest that the corrective action in the broad U.S. equity averages has further to go. 
<a name='more'></a></div>
<div style="text-align: justify;"></div>
<div class="separator" style="clear: both; text-align: center;"></div>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;">
<tbody>
<tr>
<td style="text-align: center;"><img alt="" class="alignnone size-full wp-image-31095" height="287" src="http://www.investmentpostcards.com/wp-content/uploads/2011/05/bca1.jpg" style="border-bottom: black 2px solid; border-left: black 2px solid; border-right: black 2px solid; border-top: black 2px solid; margin-left: auto; margin-right: auto;" title="bca" width="400" /></td>
</tr>
<tr>
<td class="tr-caption" style="text-align: center;">Source: BCA Research, May 26, 2011</td>
</tr>
</tbody>
</table>
The research note mentions the following indicators.
<ul style="text-align: justify;">
<li>The momentum is still falling from an overbought zone, and the 26-week rate of change of S&amp;P 500 has still not retreated to zero or below zero which typically signals a complete unwinding of overbought conditions.</li>
</ul>
<ul style="text-align: justify;">
<li>Our Equity Investor Sentiment Composite has not yet fallen to the levels that imply a sufficient easing in overly optimistic expectations.</li>
</ul>
<ul style="text-align: justify;">
<li>Moreover, new highs on the NYSE minus new lows have stayed elevated, providing another indication that money flows have not abated to a level that suggests that a new wall of worry has been erected.</li>
</ul>
<ul style="text-align: justify;">
<li>Insiders remain aggressive sellers and an easing in the sell/buy ratio to a more neutral zone would provide comfort that executives had a higher conviction that their current share price valuation was not running ahead of their expectations for business performance, as is currently the case.</li>
</ul>
<ul style="text-align: justify;">
<li>Both our Intermediate Equity Indicator (<a class="ticker" href="/stock/iei#">IEI</a>) and BCA Equity Capitulation Index (ECI) are still elevated.</li>
</ul>
The report concludes that while the cyclical backdrop remains constructive for equities, it is too soon to declare that the corrective process has run its course.
<div style="text-align: justify;"></div>
<div style="text-align: justify;">About The Author - Prieur du Plessis is chairman and founder of South African-based Plexus Asset Management, and maintains a blog at <a href="http://www.investmentpostcards.com/" target="_blank">Investment Postcards from Cape Town</a>. </div>

The views and opinions expressed herein are the author's own and do not necessarily reflect those of <a href="http://www.econmatters.com/">EconMatters</a>.
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U.S Equities: Technical Indicators Suggest Correction To Continue (Guest Post)

<div>
Coming out of the great recession, governments around the world have adopted  loose monetary policies to prop up the economies. These include U.S. central bank's QE2 (Quantitative Easing act 2) and Euro Zone's bailout of troubling peripheral countries like Greece. The current natural disasters in Japan and other countries can only add more demand for the stimulus. These policies resulted in commodity hoarding, especially in material hungry emerging economies such as China. 
It is critical to have anti-inflation anti-currency devaluation component. In this article, we explore the feasibility of adding commodity exposure to an income producing portfolio. Commodity ETFs are effective tools to cope with the current situations. In a portfolio that is designed to preserve capital for retirement needs. However, because of volatile and somewhat dangerous nature of commodites, one needs to actively manage such a portfolio by adopting tactical asset allocation strategies. 
</div>
<div>Income producing ETFs such as high yield stock ETFs and bond ETFs can be used to build a lower risk portfolio for retirement income producing purpose. We study the two plans: one is without commodity exposure and the other one with the exposure. </div>
<a rel="nofollow" href="http://www.myplaniq.com/LTISystem/f401k_view.action?ID=5,635">Retirement Income ETFs with Commodities</a> plan is an extension to <a href="http://www.myplaniq.com/LTISystem/f401k_view.action?ID=4,904">Retirement Income ETFs</a>: adding extra commodity asset class with PowerShares DB Commodity Index (DBC) and GreenHaven Continuous Commodity (GCC). This plan consists of 37 funds. These funds enable investors to gain exposure to 6 major assets: US Equity, Commodity, Foreign Equity, Emerging Market Equity, REITs, Fixed Income. Compared with <a href="http://www.myplaniq.com/LTISystem/f401k_view.action?ID=4,904">Retirement Income ETFs</a>, this plan has two additional ETFs that represent the extra commodity asset class.  
The following is the list of the candidate ETFs in the <a rel="nofollow" href="http://www.myplaniq.com/LTISystem/f401k_view.action?ID=5,635">Retirement Income ETFs with Commodities</a>: 
 
<table style="width: 100%;" border="0" cellspacing="20px">
<thead>
<tr>
<th width="45%" align="left">The list of minor asset classes covered by Retirement Income ETFs with Commodities</th>
</tr>
</thead>
<tbody>
<tr>
<td width="45%" valign="top">Commodities Broad Basket: DBC, GCC Diversified Emerging Mkts: EEM, VWO, DEM Emerging Markets Bond: EMB, PCY Foreign Large Value: PID, IDV Global Real Estate: RWX High Yield Bond: HYG Inflation-protected Bond: TIP Intermediate Government: IEI Intermediate-term Bond: CIU, CORP, MBB Large Blend: VIG Large Value: DVY, SDY, VYM, FVD Long Government: IEF, TLT Long-term Bond: LQD, VCLT Mid-cap Value: PEY Miscellaneous Sector: PFF Muni National Long: MUB Muni Short: SHM Real Estate: IYR, ICF, VNQ Short Government: SHY Short-term Bond: CSJ, VCSH World Bond: BWX, WIP </td>
</tr>
</tbody>
</table>
 
As of Mar 24, 2011, Retirement Income ETFs with Commodities investment choice is rated as and Retirement Income ETFs investment choice is rated as average based on MyPlanIQ <a rel="nofollow" href="http://www.myplaniq.com/LTISystem/f401k_showplanscorelist.action">Plan Rating methodology </a> that was designed to measure how effective a plan's available investment funds are.  It has the following detailed ratings:
 
The chart and table below show the historical performance of moderate model portfolios employing strategic and tactical asset allocation strategies (<a rel="nofollow" href="http://www.myplaniq.com/LTISystem/jsp/strategy/View.action?ID=771">SAA </a>and <a rel="nofollow" href="http://www.myplaniq.com/LTISystem/jsp/strategy/View.action?ID=1003">TAA </a>, both provided by MyPlanIQ). 
Performance chart (as of Mar 24, 2011)
<a rel="lightbox" href="http://www.myplaniq.com/LTISystem/article_viewchart.action?portfolioID=32390,32391,22062,22065&amp;compareID=4,904"> <img src="http://www.myplaniq.com/LTISystem/article_viewchart.action?portfolioID=32390,32391,22062,22065&amp;compareID=4,904" /> </a>
Performance table (as of Mar 24, 2011)
<div id="show_Port_div" style="display: block;">
<table id="comparetablePort" class="tablesorter" style="width: 100%;" border="0" cellspacing="1" cellpadding="0">
<thead>
<tr>
<th class="header" width="40%">Portfolio Name</th>
<th class="header" width="10%">1Yr AR</th>
<th class="header" width="10%">1Yr Sharpe</th>
<th class="header" width="10%">3Yr AR</th>
<th class="header" width="10%">3Yr Sharpe</th>
<th class="header" width="10%">5Yr AR</th>
<th class="header" width="10%">5Yr Sharpe</th>
</tr>
</thead>
<tbody>
<tr>
<td><a href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=32,390"> Retirement Income ETFs with Commodities Tactical Asset Allocation Moderate</a></td>
<td>10%</td>
<td>79%</td>
<td>8%</td>
<td>68%</td>
<td>11%</td>
<td>83%</td>
</tr>
<tr>
<td><a href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=32,391"> Retirement Income ETFs with Commodities Strategic Asset Allocation Moderate</a></td>
<td>11%</td>
<td>97%</td>
<td>1%</td>
<td>4%</td>
<td>4%</td>
<td>20%</td>
</tr>
<tr>
<td><a href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=22,062"> Retirement Income ETFs Tactical Asset Allocation Moderate</a></td>
<td>7%</td>
<td>40%</td>
<td>8%</td>
<td>65%</td>
<td>10%</td>
<td>62%</td>
</tr>
<tr>
<td><a href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=22,065"> Retirement Income ETFs Strategic Asset Allocation Moderate</a></td>
<td>11%</td>
<td>69%</td>
<td>3%</td>
<td>14%</td>
<td>5%</td>
<td>17%</td>
</tr>
</tbody>
</table>
</div>
Discussions:
1. Commodity ETFs are volatile. In fact, PowerShare DB Commodity Index ETF (DBC) lost 32% in 2008 while iShares S&amp;P GSCI Commodity Index (GSG) lost a whopping 46% in the same year. 
2. Simply adding commodity ETFs to a strategic asset allocation portfolio (buy and hold with regular rebalancing) did not improve the returns in the past five years. This is again due to the big loss incurred in commodtiy ETFs. 
3. Adding commodity ETFs as fund candidates in a tactical asset allocation portfolio, however, can improve returns. In the past five years, <a href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=32,390">Retirement Income ETFs with Commodities Tactical Asset Allocation Moderate</a> had extra 1% annualized return over <a href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=22,062">Retirement Income ETFs Tactical Asset Allocation Moderate</a>. 
In conclusions. commodity ETFs are effective tools to cope with the current situations. In a portfolio that is designed to preserve capital for retirement needs. However, because of volatile and somewhat dangerous nature of commodites, one needs to actively manage such a portfolio by adopting tactical asset allocation strategies. 
 Disclosure: 
MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.
Symbols:<a href ='../../../../LTISystem/f401k_symbols.action?symbol=DBC&amp;count=0094'>DBC</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=GCC&amp;count=002'>GCC</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=GSG&amp;count=0076'>GSG</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=EEM&amp;count=00107'>EEM</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VWO&amp;count=00107'>VWO</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=DEM&amp;count=0013'>DEM</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=EMB&amp;count=0033'>EMB</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=PCY&amp;count=0031'>PCY</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=PID&amp;count=0023'>PID</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IDV&amp;count=0011'>IDV</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=RWX&amp;count=0030'>RWX</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=HYG&amp;count=0096'>HYG</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=TIP&amp;count=0028'>TIP</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=WIP&amp;count=0020'>WIP</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IEI&amp;count=0016'>IEI</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=CIU&amp;count=00104'>CIU</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=CORP&amp;count=002'>CORP</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=MBB&amp;count=0074'>MBB</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VIG&amp;count=0014'>VIG</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol= DVY&amp;count=001'> DVY</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=SDY&amp;count=0012'>SDY</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VYM&amp;count=0012'>VYM</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=FVD&amp;count=0010'>FVD</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IEF&amp;count=0083'>IEF</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=TLT&amp;count=0083'>TLT</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=LQD&amp;count=0064'>LQD</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VCLT&amp;count=005'>VCLT</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=PEY&amp;count=0010'>PEY</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=PFF&amp;count=0011'>PFF</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=MUB&amp;count=0079'>MUB</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=SHM&amp;count=005'>SHM</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IYR&amp;count=00103'>IYR</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=ICF&amp;count=0084'>ICF</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VNQ&amp;count=00100'>VNQ</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=SHY&amp;count=0080'>SHY</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=CSJ&amp;count=0068'>CSJ</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VCSH&amp;count=008'>VCSH</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=BWX&amp;count=0043'>BWX</a>,
Exchange Tickers: (DBC),(GCC),(GSG),(EEM),(VWO),(DEM),(EMB),(PCY),(PID),(IDV),(RWX),(HYG),(TIP),(WIP),(IEI),(CIU),(CORP),(MBB),(VIG),(DVY),(SDY),(VYM),(FVD),(IEF),(TLT),(LQD),(VCLT),(PEY),(PFF),(MUB),(SHM),(IYR),( ICF),(VNQ),(SHY),(CSJ),(VCSH),(BWX)
 
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PowerShares DBmmodity Index Optimum Yield Diversified Fund

iShares Dow Jones Select Dividend Index Fund

iShares JPMorgan USD Emerging Markets Bond Fund

First Trust Value Line Dividend Index Fund ETF

iShares Dow Jones International Select Dividend Income Fund

iShares Trust Dow Jones US Real Estate Fund Index

iShares S&P National AMT-Free Municipal Bond Fund

PowerShares Emerging Markets Sovereign  Portfolio

iShares S&P US Preferred Stock Index Fund

PowerShares ETF Trust International Dividend Achievers Portfolio

VCLT

SPDR DB International Government Inflation-Protected Bond ETF

Tactically Manage An Income Producing Portfolio With Commodity Exposure

One of the most glaring holes in our education system is retirement investing. Much is said about day trading and the high wire acts of Hedge Funds. Retirement investing is a long term proposition and is similar to looking after your health – do what is sensible and have occasional checkups that become more frequent as you age. Boomers are getting to retirement age without sufficient funds and the group behind them are faring no better. As social security and other retirement schemes are under increasing pressure with debt and inflcation, we are simply going to have to be more active in our own retirment plans. Nobody cares about your retirement investments as much as you do.
A simple <a href="http://www.myplaniq.com/LTISystem/f401k_view.action?ID=5,464">portfolio </a>(six ETFs – index funds – no fancy management – one fund for each of six different classes). over a five year period, buy and hold has returned 7% and a more active momentum strategy has returned 13%. This is a simple, easy to understand fund and investment approach that can be used as a benchmark for what others are telling you.
We are investigating and breaking down luminary portfolios for ideas and approaches to retirement investing to help gain understanding and experience.
 The <a href="http://www.fundadvice.com">FundAdvice </a>Ultimate Buy and Hold Portfolio is tracked by MarketWatch.com's <a href="http://www.marketwatch.com/lazyportfolio/portfolio/fundadvice-ultimate-buy-hold">lazy portfolios</a>, maintained by Paul Farrel. The portfolio is very diversified in equity asset classes although corporate bonds are missing. The plan consists of 11 funds. These funds enable participants to gain exposure to 5 major assets: US Equity, Foreign Equity, REITs, Emerging Market Equity, Fixed Income.
 
<table style="width: 50%;" border="0">
<thead>
<tr>
<th align="left">Asset Class</th>
<th align="left">Ticker</th>
<th align="left">Original Portfolio Holdings </th>
</tr>
</thead>
<tbody>
<tr>
<td width="40%">DIVERSIFIED EMERGING MKTS</td>
<td width="20%">VEIEX</td>
<td width="40%">6%</td>
</tr>
<tr>
<td width="40%">LARGE BLEND</td>
<td width="20%">VFINX</td>
<td width="40%">6%</td>
</tr>
<tr>
<td width="40%">Intermediate Government</td>
<td width="20%">VFITX</td>
<td width="40%">20%</td>
</tr>
<tr>
<td width="40%">SHORT GOVERNMENT</td>
<td width="20%">VFISX</td>
<td width="40%">12%</td>
</tr>
<tr>
<td width="40%">Inflation-Protected Bond</td>
<td width="20%">VIPSX</td>
<td width="40%">8%</td>
</tr>
<tr>
<td width="40%">Foreign Large Value</td>
<td width="20%">VTRIX</td>
<td width="40%">12%</td>
</tr>
<tr>
<td width="40%">Foreign Large Blend</td>
<td width="20%">VDMIX</td>
<td width="40%">12%</td>
</tr>
<tr>
<td width="40%">SMALL BLEND</td>
<td width="20%">NAESX</td>
<td width="40%">6%</td>
</tr>
<tr>
<td width="40%">SMALL VALUE</td>
<td width="20%">VISVX</td>
<td width="40%">6%</td>
</tr>
<tr>
<td width="40%">LARGE VALUE</td>
<td width="20%">VIVAX</td>
<td width="40%">6%</td>
</tr>
<tr>
<td width="40%">REAL ESTATE</td>
<td width="20%">VGSIX</td>
<td width="40%">6%</td>
</tr>
</tbody>
</table>
 
<table border="0">
<thead>
<tr>
<th align="left">Asset Class</th>
<th>Number of funds</th>
<td style="vertical-align: top;">Lazy Portfolio Percentage</td>
</tr>
</thead>
<tbody>
<tr>
<td>Balanced Fund</td>
<td style="text-align: center;">0</td>
<td style="vertical-align: top; text-align: center;"></td>
</tr>
<tr>
<td>REITs</td>
<td style="text-align: center;">1</td>
<td style="vertical-align: top; text-align: center;">6</td>
</tr>
<tr>
<td>Fixed Income</td>
<td style="text-align: center;">3</td>
<td style="vertical-align: top; text-align: center;">40</td>
</tr>
<tr>
<td>Commodity</td>
<td style="text-align: center;">0</td>
<td style="vertical-align: top; text-align: center;"></td>
</tr>
<tr>
<td>Foreign Equity</td>
<td style="text-align: center;">2</td>
<td style="vertical-align: top; text-align: center;">24</td>
</tr>
<tr>
<td>Emerging Market Equity</td>
<td style="text-align: center;">1</td>
<td style="vertical-align: top; text-align: center;">6</td>
</tr>
<tr>
<td>US Equity</td>
<td style="text-align: center;">4</td>
<td style="vertical-align: top; text-align: center;">24</td>
</tr>
<tr>
<td>Other</td>
<td style="text-align: center;">6</td>
<td style="vertical-align: top; text-align: center;"></td>
</tr>
<tr>
<td>Total</td>
<td style="text-align: center;">11</td>
<td style="vertical-align: top; text-align: center;"></td>
</tr>
</tbody>
</table>
The ETF Portfolio has:
 (EEM) for emerging markets, (SPY) forlarge blend, (IEI) for the intermediate government bond, (SHY) for the short treasury, (TIP) for inflation protected bonds, (EFV) for foreign large blend, (IWM) for the small blend, (IWN) as small value, (IWW) for large value, (IYR) for real estate.
 As of Mar 21, 2011, this plan investment choice is rated as average based on MyPlanIQ <a rel="nofollow" href="http://www.myplaniq.com/LTISystem/f401k_showplanscorelist.action">Plan Rating methodology </a> that was designed to measure how effective a plan's available investment funds are . It has the following detailed ratings:
Diversification -- Rated as average (49%) Fund Quality -- Rated as average (48%) Portfolio Building -- Rated as above average (72%) Overall Rating: average (58%)
<h2>Portfolio Discussions</h2>
This is a well balanced portfolio with access to five asset classes. In the original, Emerging markets and Real Estate is underweighted and Commodities are not represented at all. We are going to compare the original portfolio with an ETF portfolio with standard Strategic Asset allocation and Tactical Asset allocation weightings.
 SAA will have 40% in Fixed income and 15% in each of the other asset classes TAA will have 40% in Fixed income and 30% in the two top performing asset classes
The ETF portfolio uses a simpler structure -- one ETF for each asset class -- VTI or SPY, VEU or EFA, VWO or EEM, VMQ or IYR, BND or AGG.
With any of these ETFs, we would expect the performance would be similar to the Mutual Fund versions because they have high trading volume. They don't have the same history as the Mutual Funds if you want to go back ten years.
Performance table (as of Mar 21, 2011)
<img src="http://www.myplaniq.com/LTISystem/UserFiles/1300826311050fundadvice long term.jpg" alt="" width="640" height="251" />
<div id="show_Port_div" style="display: block;">
<h3>Portfolio Performance Comparison</h3>
<table id="comparetablePort" class="tablesorter" style="width: 100%;" border="0" cellspacing="1" cellpadding="0">
<col style="width: 359px;" /><col style="width: 82px;" /><col style="width: 82px;" /><col style="width: 82px;" /><col style="width: 82px;" /><col style="width: 82px;" /><col style="width: 82px;" /> 
<thead>
<tr>
<th class="header" width="40%">Portfolio Name</th>
<th class="header" width="10%">1Yr AR</th>
<th class="header" width="10%">1Yr Sharpe</th>
<th class="header" width="10%">3Yr AR</th>
<th class="header" width="10%">3Yr Sharpe</th>
<th class="header" width="10%">5Yr AR </th>
<th class="header" width="10%">5Yr Sharpe</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td><a href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=18487">FundAdvice Ultimate Buy and Hold Lazy Portfolio ETFs SAA </a></td>
<td>12%</td>
<td>87%</td>
<td>4%</td>
<td>18%</td>
<td>5%</td>
<td>20%</td>
</tr>
<tr class="odd">
<td><a href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=18357">Fund Advice Ultimate Buy and Hold Lazy Portfolio</a></td>
<td>10%</td>
<td>72%</td>
<td>4%</td>
<td>15%</td>
<td>5%</td>
<td>21%</td>
</tr>
<tr class="even">
<td><a href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=31573">Five Core Asset ETF Benchmark Strategic Asset Allocation Moderate</a></td>
<td>12%</td>
<td>76%</td>
<td>5%</td>
<td>16%</td>
<td>5%</td>
<td>19%</td>
</tr>
<tr class="odd">
<td><a href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=31570">Five Core Asset ETF Benchmark Tactical Asset Allocation Moderate</a></td>
<td>7%</td>
<td>42%</td>
<td>8%</td>
<td>60%</td>
<td>10%</td>
<td>63%</td>
</tr>
<tr class="even">
<td><a href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=18481">FundAdvice Ultimate Buy and Hold Lazy Portfolio ETFs TAA </a></td>
<td>5%</td>
<td>23%</td>
<td>6%</td>
<td>45%</td>
<td>8%</td>
<td>55%</td>
</tr>
</tbody>
</table>
</div>
 What we can see is that the buy and hold strategies -- the original portfolio and the two strategic asset allocation portfolios -- were running neck and neck with the tactical portfolios until we started to hit significant market turbulence around 2007. Until the spring of 2009 the tactical portfolios were clearly ahead but as we came out of the recession, it's possible to see that the buy and hold strategies have closed the gap somewhat. This is a great way of understanding what the two approaches bring over the long term.
 We note that the buy and hold strategies are virtually indistinguishable. The original portfolio has been well chosen in the sense that it is only rebalanced once a year and there is no rotation of sub-classes (for example between the different fixed income or US equity classes) and it has barely suffered at all. In a future article we will drill into the last few months and see whether moving some or all of the fixed income into cash has helped the two SAA portfolios squeeze out a little more of late.
 We also not the difference between the two TAA portfolios. The Five asset benchmark with only one fund per asset class has outperformed the plan with multiple choices. Research has shown that rotating assets in subclasses can bring benefits but, in recent days, that hasn't proven to be the case with the exception of moving fixed income to cash. The simple benchmark plans have done remarkably well over the past five years.
 The key takeaways are:
<ul>
<li>Over the longer term, when there have been downturns in the market, a tactical asset allocation strategy wins out </li>
<li>When the markets are doing well, buy and hold wins out</li>
<li>Be careful about asset class rotation -- it doesn't always give you the best returns</li>
<li>You have to be involved and aware to get the most out of your investments</li>
</ul>
We can expect choppy markets over the next few months and care should be taken as to which strategy is selected.
 Disclosure:
MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.
Symbols:<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VTI&amp;count=0090'>VTI</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=SPY&amp;count=00126'>SPY</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VEU&amp;count=00123'>VEU</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=EFA&amp;count=00141'>EFA</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VWO&amp;count=00105'>VWO</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=EEM&amp;count=00105'>EEM</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VMQ&amp;count=002'>VMQ</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IYR&amp;count=00101'>IYR</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=BND&amp;count=00143'>BND</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=AGG&amp;count=00133'>AGG</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IEI&amp;count=0016'>IEI</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=SHY&amp;count=0080'>SHY</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=TIP&amp;count=0028'>TIP</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=EFV&amp;count=0031'>EFV</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IWM&amp;count=00100'>IWM</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IWN&amp;count=0021'>IWN</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IWW&amp;count=0031'>IWW</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IYR&amp;count=00101'>IYR</a>,
 
 
 
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Fund Advice Gives Sound Advice

The Treasury sold $10 billion of five-year Treasury Inflation Protected Securities (TIPS) at a negative yield for the first time at a U.S. debt auction as investors bet the Federal Reserve will be successful in halting deflation.
The iShares Lehman 3-7 Yr Treasury Bond ETF (NYSE: <a class="ticker" href="/stock/iei#NYSE">IEI</a>), which seeks investment results that correspond to the price and yield performance of the Barclays Capital U.S. 3-7 Year Treasury Bond Index, is up slightly, to $118.74.
According to a Bloomberg report, "The securities drew a yield of negative 0.55 percent, the same as the average forecast in a Bloomberg News survey of 7 of the Federal Reserve's 18 primary dealers. The sale was a reopening of an $11 billion offering in April. Conventional Treasuries rallied amid speculation about the amount of debt the Fed may purchase to spur the economy in a strategy called quantitative easing."
“It signals people's expectation of the Fed being able to create some inflation with the QE program,” Alex Li, an interest-rate strategist in New York at Deutsche Bank AG, told the news service. “With nominal rates so low, in order have high TIPS breakevens you've got to have negative real yields on the five-year.”
TIPS are government bonds that offer coupon payments that are inflation-adjusted.
The Bloomberg report notes that "The fixed payment on five-year TIPS, known by traders as the real yield, has been pushed below zero because the increase in the consumer price index is greater than the yield on regular five-year U.S. notes, which has fallen along with other Treasury yields as investors sought the relative safety of U.S. government debt."
Thirty-year bond yields dropped three basis points to 3.9 percent at 1:48 p.m. in New York, according to BGCantor Market Data. Yields on 10-year notes fell two basis points to 2.54 percent.

Offerings

Intraday Update

Treasury Auction Sees First Negative Yield Ever (IEI)

Is there a bond bubble today? Many well known investors and portfolio managers certainly seem to think so. 
In fact about a month ago Jeremy Siegel came out with an article in the Wall Street Journal proclaiming a huge bond bubble was about to burst, even comparing this to the technology equity bubble of the early 2000s. 
In addition almost every portfolio manager and guest on CNBC within the past 5 months has been warning of the bursting of the bubble, with equities the clear preferred investment. 
Although quality equities should indeed have higher returns over the next 10 years compared to bonds, this should ALWAYS be the case. If a less risky asset is expected to return the same or more as a risky asset why ever buy the risky one? However the ‘bubble' talk in my opinion is dead wrong. 
Although chances of significant further capital appreciation on fixed income investments is low, chances of devastating near term large increases in interest rates, are EXTREMELY LOW. And this is what would need to happen to cause a ‘bursting of a bubble'. 
Interest rates are not going anywhere anytime soon, for if they did mortgage rates, the housing market, the economy, and the equity market would falter. The FED keeps telling you interest rates will remain extremely low for an extended period of time, but no one wants to believe it. 
Over the past century the 2 largest single calendar year 10 year Treasury yield increases were +2.0% from 1979-1980 and 2.5% from 1980-1981. Besides these two years there were several increases in the 1.5% range (2009 was one of these years). 
Let's take a hypothetical portfolio composed of 25% Ishares 3-7 Yr. Treasury (NYSE: <a class="ticker" href="/stock/iei#NYSE">IEI</a>), 25% Ishares 7-10 Yr. Treasury (NYSE: <a class="ticker" href="/stock/ief#NYSE">IEF</a>), 25% Ishares Investment Grade Corporate Debt (NYSE: <a class="ticker" href="/stock/lqd#NYSE">LQD</a>), and 25% Vanguard Total Bond Market Index ETF (NYSE: <a class="ticker" href="/stock/bnd#NYSE">BND</a>). This is an extreme example as almost all investors should have some allocation to bonds and equities, but it will illustrate the point nicely. 
In 2009, a year where interest rates increased as much as in any time in history (besides 1979-1981 on an absolute basis) this portfolio would have returned +2.36%. This is the doomsday scenario the bond bubbleistas are presenting. Not quite comparable to the -80% or so technology stocks experienced in the 2000 implosion.
This is not to say longer duration bonds are not risky at this point, but if you keep duration reasonable (the example portfolio has duration of 6 years), bonds still should be an important part of most investor's portfolios. 
Needless to say I have a strong feeling a lot of managers will be waiting for a bubble to burst, when in reality it never formed.

CNBC

Wall Street Journal

Personal Finance

Bond Bubble, I Think Not! (IEI, IEF, LQD, BND)

The U.S. Department of the Treasury today designated Europäisch -Iranische Handelsbank (EIH), one of the few remaining European banks actively facilitating business with Iranian banks and handling billions of dollars worth of transactions on their behalf. Today's action was taken pursuant to Executive Order (E.O.) 13382, which blocks the property of designated weapons of mass destruction (WMD) proliferators and their supporters, thereby isolating them from the U.S. financial system. 
Headquartered in Hamburg, Germany, EIH provides financial services to Bank Mellat, Persia International Bank, the Export Development Bank of Iran and Post Bank of Iran, all previously designated by Treasury pursuant to E.O. 13382 and by the European Union. 
"EIH has acted as a key financial lifeline for Iran. As one of Iran's few remaining access points to the European financial system, EIH has facilitated a tremendous volume of transactions for Iranian banks previously designated for proliferation," said Under Secretary for Terrorism and Financial Intelligence Stuart Levey. "As international sanctions tighten, Iran will find it increasingly difficult to find banks like EIH that will cooperate with it. Treasury will continue to target any bank, wherever located, that supports Iran's nuclear or missile programs."
EIH has facilitated Iran's proliferation activities on a series of occasions. Examples include:
In 2009, EIH and Bank Mellat facilitated nearly $350,000 of business between a weapons exporter and a subsidiary of WMD proliferator Iran Electronics Industries (<a class="ticker" href="/stock/iei#">IEI</a>).
In 2007, EIH and Bank Mellat facilitated a transaction of more than $250,000 directly between IEI and the same arms exporter.
In a six-month period beginning in late 2007, EIH and the Export Development Bank of Iran enabled Iran's missile programs to purchase more than $3 million of material. 
Also in 2007, almost $1 million in business involving an Iranian WMD proliferator was facilitated by EIH and Bank Mellat.
EIH also engages in the type of deceptive practices that have become the hallmark of Iranian government-controlled financial institutions. In addition to providing financial services to Iranian WMD proliferators described above, EIH actively obscures Iranian involvement in the process.
Not only has EIH provided financial services to Bank Mellat, the two banks also share leadership. Ali Divandari has served as EIH Deputy Chairman of the Board and Bank Mellat's Chairman and Managing Director and was designated by Treasury under E.O. 13382 in November 2009 and by the EU in July 2010.
Bank Mellat was designated as a supporter of the Atomic Energy Organization of Iran (AEOI) and Novin Energy Company in October 2007. Persia International Bank, a Bank Mellat subsidiary, was also designated in October 2007 for being owned or controlled by Bank Mellat. The AEOI, which reports directly to the Iranian president, is the main Iranian organization for research and development of nuclear technology and manages fissile material production programs. Novin Energy, AEOI's financial conduit, has transferred millions of dollars on behalf of AEOI to entities associated with Iran's nuclear program. Both AEOI and Novin Energy are designated by Treasury under E.O 13382 and by the United Nations Security Council in Resolution 1747.
The Export Development Bank of Iran was designated by Treasury in October 2008 pursuant to E.O. 13382 for providing or attempting to provide financial services to the Iranian Ministry of Defense and Armed Forces Logistics (MODAFL), which was previously designated by the Department of State pursuant to E.O. 13382 in October 2007.
Treasury designated the Post Bank of Iran pursuant to E.O. 13382 in June 2010 for providing financial services to, and acting on behalf of, Bank Sepah since its designation by Treasury in January 2007 for its support and services to Iran's missile industries and subsequent designation by the United Nations Security Council in March 2007.
EIH is the first financial institution designated by Treasury for facilitating Iran's proliferation activities since the Department issued the Iranian Financial Sanctions Regulations on August 16, 2010 to implement the Comprehensive Iran Sanctions Accountability and Divestment Act of 2010. Under these regulations, Treasury may prohibit, or impose strict conditions on, foreign financial institutions' access to the U.S. financial system for facilitating significant transactions or providing significant financial services for a financial institution designated by the U.S. -- such as EIH -- in connection with Iran's WMD proliferation or support for international terrorism. EIH is the 17th financial institution designated by the United State for such activities.
The United States has closely consulted with the German government in taking today's action against EIH and is aware that the German government is also taking steps under its national authorities.

Global

Treasury Department Targets Iranian-Owned Bank in Germany Facilitating Iran's Proliferation Activities  

Demand for 5-Year Treasury notes exceeded expectations Wednesday, as the government sold $37 billion in new debt.
There was a yield of 1.796 percent with the bid 3.06 times the number of dollars auctioned off, a measure known as the bid-to-cover ratio.
Foreign demand was the best in four years, with indirect bids representing 47% of the total.
The five-year sale was the second of three debt auctions scheduled this week, totaling $104 billion.
The Shares Lehman 3-7 Yr Treasury Bond ETF (NYSE: <a class="ticker" href="/stock/iei#NYSE">IEI</a>) is up 0.28% today, to $115.57.

Specialty ETFs

Movers

5-Year Treasury Auction Exceeds Expectations (IEI)

Last week I <a href="http://randomroger.blogspot.com/2010/06/bond-etf-portfolio.html">posted a bond ETF portfolio</a> to spark some conversation about how to structure bond portfolios and the role ETFs can or should play in a diversified bond portfolio. Before the virtual ink dried on that one we've had quite a few new bond ETFs come out so I thought it would be interesting to construct a completely different portfolio and see where the discussion goes.
The portfolio from last week was;
iShares TIP Bond Fund (TIP) (client holding) iShares iBoxx Investment Grade Corp Bond Fund (LQD) iShares Barclays Intermediate Credit Bond Fund (CIU) iShares JPMorgan USD Emerging Markets Bond Fund (EMB) Currency Shares Australia Trust (FXA) (client holding)
For the portfolio this week, I'm mostly targeting the same segments of the bond market but hopefully the funds are different enough to continue the dialogue.
PIMCO 1-5 Year TIPS ETF (STPZ) (I own this one) Claymore Bulletshares 2013 Corporate Bond ETF (BSCD) SPDR Barclays Convertible Securities ETF (CWB) SPDR Barclays Capital International Corporate Bond ETF (IBND) iShares Diversified Alternatives Trust (ALT) WisdomTree Dreyfus Brazilian Real Fund (BZF)
So the TIP exposure; obviously I believe in the exposure despite the balance tilting toward deflation these days. The other day a reader left a comment on a different post saying why he liked the iShares 1-3 Year Treasury Bond Fund (SHY). Since STPZ' inception it is up 3.39% versus 0.26% for SHY. The two seem to have the same day to day volatility but STPZ has been inching up as opposed to inching sideways. STPZ has payed a few small dividends but interestingly the dividends are a little bigger (eyeballing the dividends reported on Yahoo finance) than from SHY.
Claymore just (as in yesterday) listed a suite of corporate bond ETFs that each target maturing in a specific year. They run from 2011-2017 and the funds will liquidate on December 31 of the year they are scheduled to mature. They obviously allow for targeting very narrow portfolio elements which is a plus but the yield will still not be constant from the day someone might buy one of the funds. The reason for this is that over time if the funds attract assets then more bonds will have to be bought for the fund and those subsequent purchases will take in the prevailing yield at that time. I think this concept for an ETF is a huge positive because while the yield might move the interest rate sensitivity will be very similar to buying an individual bond with the same maturity. Including BSCD in this portfolio creates awareness for anyone who has not heard about these funds yet.
CWB's chart looks a lot like the chart for the SPDR High Yield Bond ETF (JNK). Since CWB's inception 14 months ago it is up 17.91% versus 12.89% for JNK. CWB was not around in 2008 but in the last few weeks CWB is down 5.38% versus 4..07% for JNK. When times are good CWB is a good bet to party on, relative to bond funds, but it will likely feel plenty of pain during the bad times. The question becomes do you want that sort of attribute in your bond portfolio in the current environment.
IBND is also a new fund. I <a href="http://www.blogger.com/http//www.thestreet.com/story/10775140/1/european-bond-etf-targets-volatile-currencies.html">wrote about it</a> for thestreet.com so the short version is that it is very heavy in euro denominated bonds which is a negative. One point I make in the street article is that for the time being corporate bonds in Europe could be less volatile than sovereigns and as ugly as the euro is right now, it is down a lot from where it was.
ALT is not a bond fund, it is an absolute return vehicle. In its six months it has generally traded like a bond fund minus the yield. The point is not to buy a fund that pays no dividend but to think about the possibility that if interest rates rise some portion of a bond portfolio should possibly be allocated to bond fund substitutes. The Collar Fund (COLLX) bills itself as a bond substitute. If rates do go up in a meaningful way bond funds will go down in varying magnitudes. Finding a couple of things to hold that might pay a little interest but more importantly are less likely to go down a lot if rates go up a lot could be better ways to offset the volatility of an equity portfolio.
The question with BZF, as in the other post with FXA, is whether or not a currency fund can be a bond fund substitute. BZF went down quite a bit less than JNK in 2008 and came back quicker too. It has been much bumpier than the iShares 3-7 Year Treasury ETF (IEI) most of the time but that may not be as useful a comparison as with JNK.
There are increasingly more bond ETFs available making more sophisticated portfolios possible. This space will continue to see new product come making it all the more useful--like maybe single country bond ETFs, the indexes for these already exist. PowerShares (I think it was PowerShares) filed for bond sector funds a while back, it would be nice to see those list as well. 
<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/8532070-2116255127002563798?l=randomroger.blogspot.com' alt='' /></div>

Spdr Barclays Capital Convertible Securities Etf

SPDR Barclays Capital Internationalorate Bond ETF

IBND

Bond ETF Portfolio (Updated)

PIMCO kicked off the month of November with two new ETFs yesterday (11/02/2009).  These are the 1st and 2nd launched in November, the 6th and 7th ETFs from PIMCO, and the 999th and <a href="http://investwithanedge.com/1000th-etf-hits-the-tape" target="_blank">1,000th listed for U.S. trading</a>.
PIMCO 3-7 Year U.S. Treasury Index ETF (FIVZ) (<a href="http://www.pimcoetfs.com/FundInfo/Pages/PIMCO3-7YearUSTreasuryIndexFund.aspx?WT.svl=FundListing" target="_blank">FIVZ information page</a>) is designed to capture the return of the bellwether 5-year Treasury note.  FIVZ has two primary competitors:  iShares Barclays 3-7 Year Treasury (IEI) (<a href="http://us.ishares.com/product_info/fund/overview/IEI.htm?qt=IEI" target="_blank">IEI overview</a>) with a weighted average maturity of 4.9 years and an expense ratio of 0.15%; SPDR Barclays Intermediate Term Treasury (ITE) (<a href="https://www.spdrs.com/product/fund.seam?ticker=ITE" target="_blank">ITE overview</a>) with a weighted average maturity of 4.3 years and an expense ratio of 0.13%.
PIMCO 25+ Year Zero Coupon U.S. Treasury Index ETF (ZROZ) (<a href="http://www.pimcoetfs.com/FundInfo/Pages/PIMCO25+YearZeroCouponUSTreasuryIndexFund.aspx?WT.svl=FundListing" target="_blank">ZROZ information page</a>) is designed to capture the return of long-term U.S. Treasury Principal <a href="http://online.wsj.com/mdc/public/page/2_3020-tstrips.html" target="_blank">STRIPS</a>.  Long-term zero-coupon bonds are highly sensitive to changes in interest rates and can be as volatile as the stock market.  ZROZ will compete with Vanguard Extended Duration Treasury ETF (EDV) (<a href="https://personal.vanguard.com/us/funds/snapshot?FundId=0930&amp;FundIntExt=INT" target="_blank">EDV snapshot</a>) which invests in 20+ year zero-coupon bonds and has an expense ratio of 0.14%
Both funds will pay dividends monthly and cap expenses at 0.15% for one year.  Neither fund had any volume on their first day of “trading”.
PIMCO entered the ETF fray to tremendous fanfare with the <a href="http://investwithanedge.com/pimco-enters-etf-arena-tuz" target="_blank">release of their first fund</a> back in June.  Since then, they seem to be taking more of a “build it, they will come” attitude, an approach that seems not to be working very well.  They launched the <a href="http://investwithanedge.com/pimco-quietly-launches-tenz" target="_blank">PIMCO 7-15 Year U.S. Treasury Index ETF (TENZ)</a> in September without even announcing it.  At least they managed to get out a <a href="http://www.pimcoetfs.com/News/Pages/PIMCOLaunchesFIVZandZROZ.aspx" target="_blank">press release</a> for FIVZ and ZROZ.
The shortcomings of the PIMCO ETF marketing plan can be seen in the low trading levels for their funds.  Zero volume days are still a regular occurrence for TENZ, and now FIVZ and ZROZ have started off on the same foot.  Their most successful ETF product has been <a href="http://investwithanedge.com/pimco-launches-tips-etf-stpz" target="_blank">PIMCO 1-5 Year U.S. TIPS Fund (STPZ)</a>, a fund that has no competition.
Disclosure compliant with <a href="http://investwithanedge.com/about-time-ftc-16-cfr-part-255" target="_blank">FTC 16 CFR Part 255</a> covering writer, editor, and publisher: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.
<img src="http://investwithanedge.com/?ak_action=api_record_view&amp;id=6720&amp;type=feed" alt="" />

Two More Bond ETFs from PIMCO: FIVZ and ZROZ

The treasury market got a boost today as yields trended down further to touch their lowest levels since May. 
Ishares 1-3 Yr. Treasury ETF (NYSE: <a href="/stock/shy">SHY</a>) is up 0.14%, Ishares 3-7 Treasury ETF (NYSE: <a href="/stock/iei">IEI</a>) is up 0.37%, and Ishares 7-10 Yr. Treasury ETF (NYSE: <a href="/stock/ief">IEF</a>) is up 0.7% in late day trading. 
Bonds got a further tailwind earlier this afternoon as consumer credit decreased more than expected.

Treasuries Having a Good Day (SHY, IEI, IEZ)

With many worried about hyper inflation due to endless bailouts and government spending why are treasury yields fairly low and have actually fallen over the past several months?
Most likely the answer is in the short to intermediate term (less than 7 years or so) deflation is a bigger threat than inflation. For instance over the past year CPI (the measure of consumer goods inflation) has decreased 1.5%, therefore if a 10 year Treasury yielded 4%, your real return would actually be 5.5%. Add in some capital gains you would be looking at upper single digit/low teen total return. 
This is what we could be seeing with short to intermediate term bonds now. If deflation or at least little or no inflation is the rule for the next couple of years short to intermediate term treasuries could be priced for a 5% - 7% real total return over the next several years. Investors can easily invest in short-intermediate term treasuries through IShares 1-3 Yr. ETF (NYSE: <a href="/stock/shy">SHY</a>), IShares 3-7 Yr. ETF (NYSE: <a href="/stock/iei">IEI</a>), and IShares 7-10 Yr. ETF (NYSE: <a href="/stock/ief">IEF</a>). 
Once beyond 5-7 years however, inflation may indeed be a LARGE concern, so I would avoid treasuries longer than 10 years in maturity.

What is the Real Yield on Treasuries? (SHY, IEI, IEF)

Many economists are debating if this recovery will be a "U", "<a href="/stock/v">V</a>", "<a href="/stock/l">L</a>", or even a "square root" shaped recovery. These of course are all describing how a chart would look if looking at <a href="/stock/gdp">GDP</a> Growth, stock performance, etc. through time. 
I feel like introducing one more shape into the mix, a "B<a href="/stock/s">S</a>" shaped recovery. 
When looking at the economic data as a whole I see improvement from the Armageddon situation we were in late last year and early this year, but things are far from a steady recovery. Despite the fact we are already at 9.7% unemployment and 15% or so underemployment, we are still loosing jobs every month. Yes, the rate of loss might have stabilized or is gradually improving but this is hardly something to get excited about. 
Housing, although stable the past 2 months, still has to survive extended 10% unemployment, another rash of adjustable resets starting later this year, a continued dump of foreclosures on the market, and end to the $8,000 tax credit, and rising interest rates over the longer term. 
Government spending and stimulus may have helped prop up parts of the economy in the short term (and some was necessary at the time to avoid catastrophe). But at some point this will need to be pulled, and the timing will need to be perfect to avoid either rapid inflation or a double dip recession. 
Another hidden piece to this puzzle that no one is talking about, is the change in accounting rules enacted earlier this year. The change of mark-to-market has propped up financial companies "earnings" over the past 6 months. This wrinkle may hide the true health of several financial companies’ health for quite a while, but not forever.
Finally the bond market (NY<a href="/stock/s">S</a>E: <a href="/stock/iei">IEI</a>, NY<a href="/stock/s">S</a>E: T<a href="/stock/l">L</a>T) is trying to tell us something as well, where rates have been nudging down steadily over the past month. This of course indicates that bond traders feel muted growth at best going forward is on tap.
Despite all this the <a href="/stock/s">S</a>&amp;P 500 (NY<a href="/stock/s">S</a>E: <a href="/stock/s">S</a>PY) is at 1044, roughly 15-20% below where it was before <a href="/stock/l">L</a>ehman fell last year, and 50-55% above its March lows. <a href="/stock/s">S</a>oon the market will tell us what shape the recovery will be, but at these levels one has to weigh the future possible gain and the possible risk

Short Ideas

Is This a "BS" Shaped Recovery? (SPY, IEI, TLT)

John Hussman of The Hussman Funds sees value in short and medium term US Treasuries. Mr. Hussman states "Presently, the yield curve is so steep and incipient inflation pressures are sufficiently weak that Treasuries shorter than about 10-years in maturity have reasonable (though not unusually attractive) yield characteristics." 
He continues to believe that market weakness going forward should buoy treasury total returns into the high single digits. Individual investors can enter this trade easily through IShares short to intermediate treasury ETFs (NYSE: <a href="/stock/shy">SHY</a>, NYSE: <a href="/stock/iei">IEI</a>, and NYSE: <a href="/stock/ief">IEF</a>).
"While there is significant long-term risk of inflation several years out after credit problems are more fully exhausted, I continue to believe that near term inflation concerns are as misplaced as the economic recovery hopes that have prompted them." 
Mr.Hussman also sold some precious metal shares recently on strength within his Hussman Total Return Fund (HSTRX).

Analyst Ratings

John Hussman of The Hussman Funds Sees Value in Short and Mid Term Treasuries (SHY, IEI, IEF, HSTRX)

CASH

FUND

ProShares UltraShort Lehman 7-10 Year Treasury

Comments

iShares 3-7 Year Treasury Bond ETF

空売り

iShares 3-7 Year Treasury Bond ETF (NASDAQ:IEI), 空売り情報

ニュース

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