- Bill Gross: bet against Treasuries...[oops, he did say he made a mistake though and he was sorry.]
Treasury, high-grade bond ETFs shine in 2011
December 27, 2011, 1:40 PM
With just a few trading days left in the year, exchange-traded funds that bet on Treasury debt and investment-grade debt did well in 2011, but junk bond ETFs didn’t pay off.
Among some of the biggest bond ETFs, iShares Barclays TIPS Bond Fund TIP, which focused on Treasury Inflation Protected Securities, gained 8.4% — beating last year’s return.
The iShares iBoxx $ InvesTop Investment Grade Bond Fund LQD returned 4.1%, less than half of its 2010 gain.
The iShares Barclays Aggregate Bond Fund AGG advanced 3.8%, also a slowdown from 2010.
Meanwhile,Vanguard Total Bond Market ETF BND rose 3.4%.
The iShares Barclays 20+ Year Treasury Bond Fund TLT jumped 25% in 2011.
A fund that bets against long-term Treasury bonds – the ProShares UltraShort Lehman 20+ Year Treasury ETF TBT, plunged 48%, on top of a 26% drop in 2010.
The two biggest ETFs that favor high-yield bonds, also known as speculative-grade bonds or junk bonds, suffered losses as investors moved away from such risky assets.
The SPDR Barclays Capital High Yield Bond ETF JNK lost 2.1%, coming off 14% gains in 2010 and almost an 38% jump in 2009.
The iShares iBoxx $ High Yield Corporate Bond Fund HYG slipped 1.5%, also coming off much bigger returns in the last two years.
– Deborah Levine |
