Gold ETFs are expanding again after heavy outflows capped 2020 s record year, while Chinese demand is growing 4 weeks ahead of the key Lunar New Year shopping season
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The chief executive and founder of DoubleLine suggested looking at a beaten-up and unloved sector of credit markets: bank loans. Alex Flynn/Bloomberg
Risks lurk in an overvalued stock market and the bond market with inflation on the horizon, DoubleLine chief executive and founder Jeffrey Gundlach said. But the fund manager dubbed by
Barron’s as the Bond King nearly a decade ago does have one pick for income investors.
In an interview with CNBC, Gundlach suggested looking at a beaten-up and unloved sector of credit markets: bank loans, which ended 2020 with price losses in many cases as fund investors fled the sector. By contrast, fund investors rushed into other parts of the credit market, especially junk bonds, in their quest to grab what little income was available after the Federal Reserve slashed short-term interest rates to zero and provided unprecedented support to the corporate bond market.
State Borrowing at 10-Year High, But Muni ETFs Still Going Strong January 13, 2021
The municipal bond market is experiencing a boom as more states seek to capitalize on low rates to issue new debt to cover rising costs. Municipal bond exchange traded funds continue to strengthen as income hunters look for more attractive yield-generating assets in a lower-for-longer rate environment.
Over the past three months, the
SPDR Nuveen Bloomberg Barclays Municipal Bond ETF (NYSEArca: TFI) was up 1.9%.
According to Refinitiv data, muni bonds for new projects hit $252 billion in 2020, after municipal bond issuance in 2020 was at its highest in a decade. The new borrowing put the total amount of outstanding municipal debt above $3.9 trillion for the first time since 2013, the Wall Street Journal reports.
Fighting Climate Change via ETFs was Popular in Late 2020
Key Takeaways
Despite thematic ETFs representing just 2% of the U.S. listed fund market, assets tied to these long-term growth strategies climbed 78% in the fourth quarter aided by strong net inflows.
Clean energy ETF assets doubled in the last three months of 2020 to $18 billion, amid optimism of the Biden administration. These ETFs manage more assets than funds focused on big data or connectivity mega-themes.
Fundamental Context
At the end of 2020, there were 148 thematic ETFs managing $104 billion in assets according to Global X. While thematic ETFs represent just 2% of overall ETF assets, the base grew a whopping 78% in the last three months of 2020, aided by strong performance and $26 billion of net inflows. Relative to the end of 2019, thematic ETFs jumped 274%. Global X characterizes thematic ETFs the company and its peers offer as following long-term growth-focused strategies; unconstrained by arbitrary geograph