AGG - PIMCO says the bond market offers opportunities for investors

2023-07-13 09:52:41 ET

PIMCO argued on Thursday morning that the outlook of the bond market highlights valuations that suggest the potential for equity-like returns with less risk.

“The bond market offers potential for equity-like returns with less volatility and downside risk compared to the stock market, making it valuable for building resilient portfolios,” the investment management firm said .

The organization also stated that they anticipate to see policy tightening and bank challenges begin to impact the markets more directly over the next handful of quarters.

PIMCO went on to say: “Over the next several years, we expect more pronounced economic cycles with risks skewed to the downside as high sovereign debt levels and hesitancy to reignite inflation will likely to limit policymakers’ willingness and capacity to inject fiscal and monetary stimulus.”

For investors interested in tracking the bond market, see listed below the five largest bond exchange traded funds along with their 2023 price action:

• Vanguard Total Bond Market ETF ( NASDAQ: BND ) +0.3% .
• iShares Core U.S. Aggregate Bond ETF ( NYSEARCA: AGG ) +0.2% .
• Vanguard Total International Bond ETF ( NASDAQ: BNDX ) +1.3% .
• iShares 20+ Year Treasury Bond ETF ( NASDAQ: TLT ) -0.6% .
• Vanguard Intermediate-Term Corporate Bond ETF ( VCIT ) +1.2% .

Moreover, early on during Thursday’s trading session and investors will have seen that Treasury yields have continued to falter. The U.S. 10-Year Treasury yield ( US10Y ) fell 5 basis points to 3.80% and the U.S. 2-Year yield ( US2Y ) slid 10 basis points to 4.64%.

More on the Bond Market:

• US2Y - US10Y Spread: Yields Heading Lower, Spread Higher
• Trading U.S. Interest Rates Ahead Of Fed Meeting
• Principal Financial says investors should stay cautious for rest of 2023

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