One specialist on exchange-traded funds believes that investment in bonds with long-term yields could be the most profitable option for money this year.
"The iShares 20-year Treasury ETF (TLT) will get the biggest bang for its buck [and] some of the intermediate-term products like the Vanguard Intermediate-Term Corp Bond (VCIT) will get some bang for the buck," Todd Rosenbluth, who works for VettaFi, stated on Monday during an episode of CNBC's "ETF Edge" program.
Rosenbluth went on to say that despite the fact that the short-term items enjoyed a great deal of success in the previous year, they will "largely remain stagnant or earn a little more than their overall income."
In the event that the Federal Reserve reduces interest rates by a greater amount than anticipated, the head of research for the company suggests that investors should remain in longer-term products in order to reap the benefits.
Benjamin Slavin, who works for BNY Mellon, mentioned in the same interview that although flows were directed toward ultra-short or short-term government ETFs and money market funds in 2023, the situation shifted near the end of the year.
According to Slavin, who is the global head of ETFs for the company, "We saw a lot of money start to move out of the short end of the curve and into intermediate duration."
You started to see that image start to form where advisors are seeking and retail investors are wanting to capture or lock in those higher yields.
Also perhaps gain some capital appreciation as rates back up," he continued. "You started to see that picture start to emerge."
Follow for more updates