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3 ETF Trends That Might Shock The “Risk-On” Mindset

Stocks are not the only asset in demand as shown in these charts

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3. Yield Curve Flatter, Not Steeper in 2014? In 2013, perceived economic well-being coupled with the Fed signaling an intent to slow its asset purchases sent 10-year and 30-year U.S. bonds down much faster than shorter-term bonds (e.g., 1 year, 5-year, etc.). This could be seen in a steeper yield curve. Investors could also profit from the trend via iPath Treasury Steepener (STPP).

STPP 200

In 2014, however, a different picture may be developing. merge. Money has been slowly creeping back into assets on both the long end of the yield curve as well rates-sensitive REITs. In contrast, demand for the shortest end of the treasury curve (e.g., 1-3 years) has been neutral at best. The consequence? The yield curve is stabilizing and may ultimately flatten as the year progresses as yields on shorter-term bonds rise while yieds on longer-term bonds run in place. Year-to-date, iPath Treasy Flattener ETN (FLAT) could be signalling a changing of the guard.


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Disclosure StatementETF Expert is a web log (”blog”) that makes the world of ETFs easier to understand. Gary Gordon, MS, CFP is the president of Pacific Park Financial, Inc., a Registered Investment Adviser with the SEC. Gary Gordon, Pacific Park Financial, Inc., and/or its clients may hold positions in the ETFsmutual funds, and/or any investment asset mentioned above. The commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities. At times, issuers of exchange-traded products compensate Pacific Park Financial, Inc. or its subsidiaries for advertising at the ETF Expert web site. ETF Expert content is created independently of any advertising relationship.

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