The Fed is expected to keep hiking rates till it achieves the target inflation rate of 2%. However, the pace of such hikes is scheduled to drop eventually. Fed Chair Jerome Powell recently stated that the central bank could start moderating the pace of rate increases as soon as the December meeting.
He added, “We don’t want to overtighten, so that’s why we are slowing down, and we are going to find our way to where the right level is.” Benchmark indices gained substantially over Powell’s assurance.
The S&P 500 gained 3%, and the Dow Jones Industrial Average gained 2.6% yesterday. Provided this momentum persists, markets could witness a sustained rally in December.
Given the backdrop, investors could consider buying quality ETF Invesco Senior Loan ETF (BKLN) before the end of the year. However, ARK Innovation ETF (ARKK) might be best avoided now.
ETF to Buy:
Invesco Senior Loan ETF (BKLN)
BKLN invests in leveraged loans in the high-yield bond space. It invests entirely in U.S. leveraged loans, giving investors a pure play on the domestic economy.
With $4.04 billion in assets under management (AUM), BKLN’s top holdings include Short Term Investments Trust Government & Agency Portfolio Institutional, with a 17.97% weighting in the fund, followed by CORPORATE BOND at 3.20%, and Mozart Borrower Lp Term Loan B 15-Sep-2028 at 1.54%.
It currently has…
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