2022 was a very challenging year for both bonds and stocks. Bonds, traditionally seen as safe havens, have plunged almost as much as stocks this year, suffering the worst of their major bear market in more than four decades.
Many experts predict that 2023 will be a better year for bonds as the US economy may slip into a mild recession. Additionally, with yields at high levels since the financial crisis, bonds are now seen as an income alternative to stocks.
Although the Fed plans to keep hiking rates as early as 2023, most of the aggressive tightening cycle is over. Inflation is likely to moderate next year as well, thus benefiting fixed income investments.
Over the past few weeks, we’ve seen significant inflows into fixed income ETFs. Many investors have dumped their bond mutual funds and bought similar ETFs for tax-loss harvesting. ETFs are not only generally cheaper than mutual funds, but also more tax efficient.
To learn more about SPDR Bloomberg 3-12 Month T-Bill ETF BILS, Vanguard Short-Term Treasury ETF VGSH and iShares 1-5 Year Investment Grade Corporate Bond ETF IGSB, please watch the short video above.
Looking for the latest recommendations from Zacks Investment Research? Today, you can download 7 best stocks for the next 30 days. Click here to get this free report.
Vanguard ShortTerm Treasury ETF (VGSH): ETF Research Reports
iShares 15 Year Investment Grade Corporate Bond ETF (IGSB): ETF Research Reports
SPDR Bloomberg 312 Month TBill ETF (BILS): ETF Research Reports
Click here to read this article on Zacks.com.
Zacks Investment Research