2024-03-25 07:48:01 ET
Summary
- It's not really possible to call long-term rates, which matter for this long-duration ETF. Although we explain some factors.
- On the other hand, we don't see inflation as being solved, and think that rates are only coming down because the Fed is observing economic risks that it isn't emphasizing.
- The Fed wouldn't emphasize the risks because it could seriously affect financial conditions, particularly in vulnerable areas like commercial real estate that Powell occasionally refers to.
- There is a credit risk in IGLB, and we think the market is pricing with certainty no credit events. In interaction with IGLB's duration, this is not a compelling angle.
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IGLB: Duration An Issue Because Of Credit Spreads