The Fed announced another 75-basis-point interest rate hike last week after August’s consumer price index (CPI) rose higher than expected. The latest interest rate hike marked the third consecutive three-quarters of a percentage point rise in a row.
Moreover, Fed officials expect the key rate to end 2022 between 4.25% to 4.5%, up from the previously expected 3% to 3.25%. This is expected to push the economy into a recession.
Looming recession fears have kept the market volatile, with the CBOE Volatility Index climbing more than 80% year-to-date. Economic uncertainties are expected to pressure stocks, some assets, and financial instruments.
iShares 20+ Year Treasury Bond ETF (TLT)
BlackRock Fund Advisors manage TLT. The fund invests in U.S. dollar-denominated fixed-rate U.S. Treasury securities with a remaining maturity of greater than or equal to twenty years. It seeks to track the performance of the ICE U.S. Treasury Bond ETF by using a representative sampling technique.
With $24.20 billion in assets under management (AUM), TLT’s top holding is United States Treasury Bond 1.875% 15-Feb-2051, which has a 12.50% weighting in the fund, followed by United States Treasury Bond 2.0% 15-Aug-2051 at 7.30%, and United States Treasury Bond 1.625% 15-Nov-2050 at 6.88%. It has a total of 35 holdings.
Its fund flows were negative $265.04 million over the past five days. Its NAV was $103.60 as of September 26, 2022. TLT has declined 30% year-to-date and 29.4% over the past year to close the last trading session at $103.68.
TLT’s POWR Ratings reflect its bleak prospects. It has an overall D rating, equating to a Sell in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
TLT has an F grade for Trade and a D for Peer. It is ranked #24 out of 40 ETFs in the Government Bonds ETFs group. Click here to see TLT’s rating for Buy & Hold.
VanEck Gold Miners ETF (GDX)
Van Eck Associates Corporation manages GDX. The fund offers investors indirect exposure to precious metals by investing in stocks of companies operating across materials, metals, and mining, gold, and silver sectors around the world.
GDX seeks to track the performance of the NYSE Arca Gold Miners Index by using the full replication technique. With $9.31 billion in AUM, GDX’s top holding is Newmont Corporation (NEM), which has a 13.26% weighting in the fund, followed by…
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