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FlexShares iBoxx 3 Year Target Duration TIPS Index Fund (ARCA:TDTT), Informe de interés en corto

FlexShares iBoxx 3 Year Target Duration TIPS Index Fund

The underlying index reflects the performance of a selection of inflation protected public obligations of the U.S. treasury, commonly known as TIPS, with a targeted average modified adjusted duration, as defined by the index provider, of approximately three years. Under normal circumstances, the fund will invest at least 80% of its total assets (exclusive of collateral held from securities lending) in the securities of the underlying index. The fund is non-diversified.

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BlackRock apuesta por bonos ligados a la inflación ante el aumento de la prima de riesgo y dudas sobre la sostenibilidad fiscal en EE. UU.

BlackRock sobrepondera bonos ligados a la inflación ante riesgo fiscal en EE. UU.

Global investment giant BlackRock has announced being &#8220;overweight&#8221; on inflation-linked bonds, signaling a strategic shift to mitigate risks stemming from &#8220;persistent inflation pressure&#8221; and growing concerns over the sustainability of U.S. government finances.
What Happened: This move comes as the firm navigates a complex economic landscape characterized by transformative &#8220;mega forces&#8221; and a challenging outlook for long-term asset allocation.
A key driver for BlackRock&#8217;s pivot to inflation-linked bonds is the mounting pressure on U.S. fiscal sustainability.
The firm specifically cited <a href="https://www.benzinga.com/news/econ-s/25/05/45479078/moodys-downgrades-us-credit-rating-over-debt-deficit-concerns">Moody&#8217;s recent downgrade</a> of the U.S. government&#8217;s top-notch credit rating, which reinforced BlackRock&#8217;s long-standing concerns about persistent U.S. budget deficits, particularly as rising interest rates escalate debt servicing costs.
The note also highlights how the U.S. debt sustainability relies on large and steady funding by foreign investors.
&#8220;The downgrade reinforces the U.S. fiscal sustainability challenge that we&#8217;ve long flagged, especially persistent U.S. budget deficits at a time when higher interest rates are boosting debt servicing costs. If these dynamics dent the confidence of foreign bond holders, rising term premium could push up bond yields and debt servicing costs even more,&#8221; explained BlacRock in its note.
Consequently, BlackRock&#8217;s strategic starting point now incorporates an expectation of rising term premiums for U.S. Treasuries and persistent inflation.
&#8220;That's why our starting point also includes our expectation of rising term premium for U.S. Treasuries and persistent inflation pressure. We go overweight inflation-linked bonds and neutral global investment grade credit given wider spreads,&#8221; the note stated.
These securities are designed to protect investors from inflation by adjusting their principal value based on changes in the Consumer Price Index (CPI), ensuring that the real value of the investment is preserved.
See Also: <a href="https://www.benzinga.com/general/market-summary/25/05/45512063/ray-dalio-warns-against-decreasing-value-of-us-dollar-amid-mounting-government-debt-risks-are-greater-than-the-rating-agencies-are-conveying">Ray Dalio Warns Against Decreasing Value Of US Dollar Amid Mounting Government Debt: &#8216;Risks Are Greater Than The Rating Agencies Are Conveying&#8217;</a>
Why It Matters: For investors seeking exposure to this strategy, a few of the inflation-linked bond ETFs available include:
<figure class="wp-block-table is-style-stripes"> 
<table class="has-fixed-layout">
<tbody>
<tr>
<td>Inflation-Linked Bond ETFs</td>
<td>YTD Performance</td>
<td>One Year Performance</td>
</tr>
<tr>
<td>Vanguard Short-Term Inflation-Protected Securities ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/VTIP#NASDAQ">VTIP</a>)</td>
<td>3.03%</td>
<td>3.68%</td>
</tr>
<tr>
<td>iShares TIPS Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TIP#NYSE">TIP</a>)</td>
<td>2.04%</td>
<td>2.21%</td>
</tr>
<tr>
<td>Schwab U.S. TIPS ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SCHP#NYSE">SCHP</a>)</td>
<td>2.44%</td>
<td>2.05%</td>
</tr>
<tr>
<td>iShares 0-5 Year TIPS Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/STIP#NYSE">STIP</a>)</td>
<td>1.79%</td>
<td>3.15%</td>
</tr>
<tr>
<td>FlexShares iBoxx 3-Year Target Duration TIPS Index Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TDTT#NYSE">TDTT</a>)</td>
<td>1.99%</td>
<td>2.29%</td>
</tr>
<tr>
<td>SPDR Bloomberg 1-10 Year TIPS ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TIPX#NYSE">TIPX</a>)</td>
<td>2.49%</td>
<td>2.87%</td>
</tr>
<tr>
<td>SPDR Portfolio TIPS ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPIP#NYSE">SPIP</a>)</td>
<td>1.85%</td>
<td>1.22%</td>
</tr>
<tr>
<td>FlexShares iBoxx 5-Year Target Duration TIPS Index Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TDTF#NYSE">TDTF</a>)</td>
<td>2.41%</td>
<td>2.10%</td>
</tr>
<tr>
<td>PIMCO 15+ Year US TIPS Index ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LTPZ#NYSE">LTPZ</a>)</td>
<td>-0.90%</td>
<td>-4.69%</td>
</tr>
<tr>
<td>PIMCO 1-5 Year US TIPS Index ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/STPZ#NYSE">STPZ</a>)</td>
<td>2.23%</td>
<td>3.88%</td>
</tr>
</tbody>
</table>
</figure>
&#8220;Economic transformation makes long-term portfolio construction more challenging,&#8221; BlackRock concluded, emphasizing its new approach of utilizing a starting point scenario for strategic views while formally tracking other potential outcomes to ensure portfolio agility.
While U.S. assets remain central to their portfolios, the move into inflation-linked bonds underscores a proactive stance against emerging fiscal and inflationary headwinds.
Price Action: The SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) and Invesco QQQ Trust ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>), which track the S&amp;P 500 index and Nasdaq 100 index, respectively, rose on Monday. The SPY was up 0.11% to $594.85, while the QQQ advanced 0.096% to $522.01, according to <a href="https://pro.benzinga.com/dashboard">Benzinga Pro</a> data.
On Tuesday, the futures of the S&amp;P 500, Dow Jones, and Nasdaq 100 indices were trading slightly lower.
Read Next:
<ul class="wp-block-list">
<li><a href="https://www.benzinga.com/25/05/45510990/federal-reserve-should-do-nothing-at-all-about-the-rising-yields-says-craig-shapiro-let-the-bond-vigilantes-eat" target="_blank" rel="noreferrer noopener">Federal Reserve Should Do ‘Nothing At All' About The Rising Yields, Says Craig Shapiro: ‘Let The Bond Vigilantes Eat'</a></li>
</ul>
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Tada Images / Shutterstock.com

BlackRock Bets On Inflation, Goes 'Overweight Inflation-Linked Bonds' Amid US 'Fiscal Sustainability Challenge:' Here's A List Of ETFs Investors Can Consider

On a day when U.S. equities are soaring, bonds may not be the first thing on many investors' minds. Even with that in mind, it is worth noting that some newer bond ETFs have rapidly accumulated assets under management, even as stocks have soared.

	Typically, a "new" ETF is <a href="http://www.benzinga.com/markets/bonds/13/04/3493707/nifty-junk-bond-etfs-your-broker-forgot-to-mention">a year old or less</a>, but in a new research note, S&amp;P Capital IQ looks at a broad swath of successful bond ETFs that have come to market over the past three years.

	"Indeed, 41 of the 181 fixed income ETFs for which we have such data have over $1 billion in assets, helped by the strong demand in 2012 for income-generating ideas," said S&amp;P Capital IQ in the note. "In 2012 alone, fixed income ETFs received approximately $53 billion in new money and these products now have nearly $250 billion in assets."

	The research firm notes that there are seven bond ETFs that debuted over the past three years that currently have at least $1 billion in AUM. S&amp;P sees that resulting from three factors: Who is the asset manager and index provider behind the product? The ETF's costs and does the ETF help to fill a need for investors better than alternatives?

	The PIMCO Total Return ETF (NYSE: <a class="ticker" href="/stock/bond#NYSE">BOND</a>) stands as an obvious example of newer bond ETF that delivers on at least two of those factors for investors. BOND has the advantage of being known as the "Bill Gross ETF" or the ETF equivalent of the massive PIMCO Total Return Fund, the world's largest mutual fund.

	Not even 14 months old, BOND has accumulated more than $5 billion in AUM and its expense ratio of <a href="http://www.pimcoetfs.com/Funds/Pages/BOND.aspx">0.55 percent is fair among actively managed ETFs</a>. Many analysts and members of the press have doted over BOND, anointing it as the savior of the actively managed ETF space. To be sure, BOND has delivered the goods in terms of AUM, returns and low-cost access to Bill Gross.

	However, all the fawning over bond obfuscates the fact that there are <a href="http://www.benzinga.com/markets/bonds/13/04/3493925/three-actively-managed-etfs-to-consider-right-now">some other noteworthy actively managed ETFs on the market today</a>.

	Chief among them is the WisdomTree Emerging Markets Local Debt Fund (NYSE: <a class="ticker" href="/stock/eld#NYSE">ELD</a>), which was also highlighted in the S&amp;P note. Something that folks often forget about the WisdomTree Emerging Markets Local Debt Fund is that this was the first actively managed ETF to surpass $1 billion in AUM. Today, ELD has over $1.9 billion in assets. With an expense ratio of 0.55 percent and an effective duration of 4.83 years, ELD has gained prominence as investors have looked for ways to get exposure to <a href="http://www.benzinga.com/markets/bonds/13/04/3479116/fundamentals-could-lift-this-em-bond-etf">strong government balance sheets in the emerging world</a>.

	ELD's country weights include Brazil, Chile, Colombia, Mexico, Peru, Poland, Turkey, South Africa, Russia, Malaysia, Indonesia, Philippines, Thailand, China and South Korea.

	Flying under the radar is the FlexShares iBoxx 3-Year Target Duration TIPS Index Fund (NYSE: <a class="ticker" href="/stock/tdtt#NYSE">TDTT</a>), which charges just 0.2 percent per year. TDTT debuted in September 2011 and has already hauled in over $1.5 billion in assets. TDTT "gives investors access to the inflation-hedging qualities of TIPS and seeks to provide targeted duration exposure through changing interest rate and economic cycles," <a href="http://www.flexshares.com/exchange-traded-funds/iboxx-3-year-target-duration-us-tips-index">according to FlexShares</a>.

	Another ETF that S&amp;P mentioned that also debuted in 2011 is the iShares Floating Rate Note Fund (NYSE: <a class="ticker" href="/stock/flot#NYSE">FLOT</a>). FLOT also charges 0.2 percent and has also amassed over $1.5 billion in assets.

	Investors looking for shorter duration high-yield corporate bonds <a href="http://www.benzinga.com/markets/bonds/13/04/3501729/three-bond-etfs-with-sub-five-year-durations">have at least two options</a> that S&amp;P mentioned. The PIMCO 0-5 Year High Yield Corporate Bond Index (NYSE: <a class="ticker" href="/stock/hys#NYSE">HYS</a>), which will turn two in June, has a juicy distribution yield of 4.87 percent and an effective duration of 1.85 years. HYS charges 0.55 percent and has more than $1.9 billion in assets.

	HYS has a rival in the form of the SPDR Barclays Short Term High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/sjnk#NYSE">SJNK</a>). Barely more than a year old, SJNK dispels the notion that investors have been pulling money out of high-yield bonds as the ETF has hauled in $1.2 billion in assets. SJNK has a modified adjusted duration of 2.06 years and fees of 0.4 percent.

	S&amp;P also noted the PowerShares Senior Loan Portfolio (NYSE: <a class="ticker" href="/stock/bkln#NYSE">BKLN</a>), which debuted in March 2011 as the first senior loan ETF. BKLN's success has triggered the introduction of at least two copycat ETFs. With a distribution yield of 4.56 percent, BKLN's yield to maturity of 5.58 percent. The ETF is the top asset-gatherer in the PowerShares lineup this year, having pulled in $1.88 billion in new cash, <a href="http://www.invescopowershares.com/flows/">according to issuer data</a>. BKLN now has over $3.4 billion in assets.

	For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

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Some Newer Bond ETFs Flourish

FlexShares, the ETF arm of Northern Trust (NASDAQ: <a class="ticker" href="/stock/ntrs#NASDAQ">NTRS</a>), plans to introduce its seventh ETF on Thursday with the debut of the FlexShares Ready Access Variable Income Fund. The ETF will trade on the New York Stock Exchange under the ticker "RAVI," <a href="http://www.nyse.com/pdfs/RAVI.pdf">according to a statement issued by the exchange</a>.

RAVI will have an annual expense ratio of 0.25%, <a href="http://www.sec.gov/Archives/edgar/data/1491978/000119312512386849/d408776d485bpos.htm">according to the fund's filing</a>. 

RAVI seeks to achieve the investment objective by investing under normal circumstances at least 65% of its total assets in a non-diversified portfolio of fixed income instruments, including bonds, debt securities and other similar instruments issued by U.S. and non-U.S. public and private sector entities. Such issuers include, without limitation, U.S. and non-U.S. governments and their agencies, instrumentalities or sponsored enterprises, U.S. state and local governments and U.S. and non-U.S. private-sector entities, such as corporations and banks, according to the filing.

FlexShares currently issues six ETFs, the largest of which is the FlexShares iBoxx 3-Year Target Duration TIPS Index Fund (NYSE: <a class="ticker" href="/stock/tdtt#NYSE">TDTT</a>). TDTT has $660.1 million in assets under management. The firm's two newest funds are the FlexShares Morningstar Emerging Market Factor Tilt Index ETF (NYSE: <a class="ticker" href="/stock/tlte#NYSE">TLTE</a>) and the FlexShares Morningstar Developed Markets ex-US Factor Tilt Index ETF (NYSE: <a class="ticker" href="/stock/tltd#NYSE">TLTD</a>), both of which debuted in late September.

For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

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FlexShares to Introduce Variable Income ETF Thursday

FlexShares, the ETF unit of Northern Trust (NASDAQ: <a class="ticker" href="/stock/ntrs#NASDAQ">NTRS</a>), could be looking to boost the size of its ETF lineup in a big way. The firm, which currently sponsors four funds, has filed plans with the Securities and Exchange Commission to possibly introduce six new dividend ETFs.

The <a href="http://www.sec.gov/Archives/edgar/data/1491978/000119312512359261/d397807d485apos.htm">filing for the funds did not include tickers or expense ratios</a>. If the funds come to market, the filing indicates they will trade on the New York Stock Exchange.

FlexShares filed plans for the following ETFs: the FlexShares Quality Dividend Index Fund, the FlexShares Quality Dividend Dynamic Index Fund , the FlexShares Quality Dividend Defensive Index Fund, the FlexShares International Quality Dividend Index Fund, the FlexShares International Quality Dividend Dynamic Index Fund and the FlexShares International Quality Dividend Defensive Index Fund.

FlexShares currently sponsors the FlexShares Morningstar Global Upstream Natural Resources Index ETF (NYSE: <a class="ticker" href="/stock/gunr#NYSE">GUNR</a>), the FlexShares iBoxx 3-Year Target Duration TIPS Index Fund (NYSE: <a class="ticker" href="/stock/tdtt#NYSE">TDTT</a>), the FlexShares iBoxx 5-Year Target Duration TIPS Index Fund (NYSE: <a class="ticker" href="/stock/tdtf#NYSE">TDTF</a>) and the FlexShares Morningstar U.S. Market Factor Tilt Index ETF (NYSE: <a class="ticker" href="/stock/tilt#NYSE">TILT</a>). 

GUNR is the largest with almost $446 million in assets under management.

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FlexShares Files Plans for 6 Dividend ETFs

Northern Trust's (NASDAQ: <a class="ticker" href="/stock/ntrs#NASDAQ">NTRS</a>) FlexShares family of ETFs, which debuted in September 2011, have reached a combined $1 billion in assets under management, the firm announced today.

"The demands of investors and the advisors who serve them continue to drive the evolution in the ETF landscape," said Shundrawn Thomas, head of Northern Trust's Exchange Traded Funds Group, in a statement. "Passing the $1 billion mark is an important milestone for us and affirms that our focus on distinctive products is valued by investors."

The four FlexShares ETFs are as follows: The FlexShares Morningstar U.S. Market Factor Tilt Index ETF (NYSE: <a class="ticker" href="/stock/tilt#NYSE">TILT</a>), the FlexShares iBoxx 5-Year Target Duration TIPS Index Fund (NYSE: <a class="ticker" href="/stock/tdtf#NYSE">TDTF</a>), the FlexShares iBoxx 3-Year Target Duration TIPS Index Fund (NYSE: <a class="ticker" href="/stock/tdtt#NYSE">TDTT</a>) and the FlexShares Morningstar Global Upstream Natural Resources Index ETF (NYSE: <a class="ticker" href="/stock/gunr#NYSE">GUNR</a>).

With over $381.6 million in AUM, the FlexShares Morningstar Global Upstream Natural Resources Index ETF is the largest of the FlexShares ETFs. The FlexShares iBoxx 3-Year Target Duration TIPS Index Fund is the second-largest with almost $327 million in AUM.

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