Munis to the MAAX: A Tailored Response to Municipal Bond ETFs March 15, 2021
The recent spike in Treasury yields is presenting challenges for some traditional municipal bond strategies. Investors can turn to a more responsive approach with the
MAAX is based off a proprietary model that incorporates momentum, along with both duration and credit risk indicators, to tactically allocate among selected VanEck Vectors Municipal Bond ETFs, which covers the full range of the risk/return spectrum in the muni market and includes five VanEck Vectors Municipal Bond ETF options.
“The model that informs MAAX’s allocations is now identifying higher interest rate risk,” writes VanEck portfolio manager David Schassler. “This results from the rapid rise in interest rates, increased correlations between bond prices and stock prices and an uptick in the volatility of interest rates. MAAX responded by reducing its interest rate sensitivity. It sold 10% of long duration bonds and re-allocat
The VanEck Vectors
® Real Asset Allocation ETF (“RAAX”) returned +4.61% versus +6.47% for the Bloomberg Commodity Index. In general, most real assets continue to benefit from the expectation of higher inflation, while oil prices were lifted higher due to supply constraints that resulted from the deadly storm in Texas. On the other hand, income producing real assets were negatively impacted by the rapid surge in interest rates. Gold prices remain under pressure due to optimism about future growth and the subsequent rise in interest rates. And lastly, Bitcoin, which RAAX added exposure to for the first time last month, surged from $32,601 to an intra-month and all-time high of $57,355.
March 15, 2021
With energy ranking as the best-performing sector to start 2021, some investors are considering momentum as a way of accessing the high-flying group. The
PXI seeks to track the investment results of the Dorsey Wright® Energy Technical Leaders Index. The underlying index is composed of at least 30 securities of companies in the energy sector that have powerful relative strength or ‘momentum’ characteristics.
Using the relative strength index, investors can identify areas with positive forward momentum. Relative strength measures a stock’s performance in relation to its peers.
A rosier outlook for economic growth and oil demand could fuel gains in energy sector-related exchange traded funds this year.
I have always held that it cannot be a coincidence that India’s richest community (the Jains) and biggest business families Ambani, Birla, Jindal, Oswal, Munjal, Hinduja, Adani are all vegetarian. The law of Karma is clearly in play: the less hurt you cause, the more abundance you attract. What I have always felt deeply disappointed […]