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ISHG is best used as a hedge against a significant decline in the US dollar, not as a core money-making investment. The ETF offers low credit and interest rate risk, but its long-term performance has been poor in nominal and real terms. Its value lies in insurance for USD-based investors worried about currency risk, providing positive carry unlike other FX hedges.
U.S. Treasury yields remain elevated after a spike following President Trump's tariff announcements earlier this year. With long-term Treasury yields still close to multi-year highs, investors are tempted to pivot away from stocks in favor of the bond market at this time.
Bond ETFs are in demand in 2025. With less than a third of the year complete, the industry has gathered $110 billion of net inflows.
U.S. stocks have been witnessing massive sell-offs this month due to trade tensions. However, these ETFs survived the bloodbath.
As wage growth slows down, many analysts noted that the Fed may have to decrease borrowing costs to prevent tightening of the real rate or inflation-adjusted policy rate.
As the odds of a global economic slowdown grow, bond ETFs are an interesting potential investing opportunity, if well-timed to coincide with central banks lowering interest rates. The SHY ETF offers bond exposure with no currency exchange risks/rewards involved, while the ISHG bond ETF offers exposure to bonds denominated predominantly in euros. Uncertain global macroeconomic situation and potential negative surprises make bonds worth considering, but timing is crucial.
Among this week's highlights indicating emerging market focus on accessing long-term debt are a 30-year issue for the Emirate of Sharjah and plans by Brazilian petrochemical company Braskem to raise hybrid debt, following recent perpetual sales by Emirates NBD, Banorte and DP World.
Over the last 40 years, bonds were the superheroes of investment portfolios. They generated high risk-adjusted returns given steadily declining yields and were
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Transcripts source: company-published earnings calls. Speaker attribution and formatting are processed in-app.