How Fixed-Income ETF Investors Can Hedge Their Bets
By: Mark McLaughlin, |Special to CNBC.com
The bond markethas had its share of volatility in the past year, sending mixed signals to investors.
The Federal Reservehas been pulling out all the stops to keep the economy growing and avoid Japan-like deflation.
At the same time, however, signs of inflation are growing, and investors are taking on more risk for higher yields .
An allocation to bonds can provide income and stability in such an unpredictable environment.
Bears and bulls alike agree that the current sluggish U.S. growth should benefit bonds.
ETFsbroadly covering investment grade, high-yield and convertible bonds are an investor’s best option to deal with uncertainty.
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ETFs broadly covering bonds in the major taxable and tax-exempt asset classes, plus exposure to convertible bonds that feature some of the upside of stocks, are an investor’s best option to deal with uncertainty.
