1 ETF That Stands to Benefit From Dovish Fed Signals

iShares iBoxx $ High Yield Corporate Bond ETF (HYG) represents the U.S. dollar-denominated high-yield liquid corporate bond market. With the rebounding bond market, it could be a solid investment for investors looking to secure their portfolios against potential stock market volatility.

Global bonds rebounded in November 2022, adding a record $2.80 trillion in market value. Amid favorable inflation data in October and November, the Fed is expected to slow down its rate hike aggression and has sent dovish signals.

Moreover, Omar Slim, a fixed-income portfolio manager at PineBridge Investments in Singapore, said, “We are starting to see a number of economic indicators that point to the fact that inflation has peaked or is peaking.”

Furthermore, Goldman Sachs Group (GS) expects the bond market to fare well in 2023. The bank expects the bond market to even become less risky in 2023.

HYG has lost marginally over the past month and 14.5% in 2022 to close the last trading session at $74.39. However, it has gained 3.1% over the past three months.

Here is what could shape HYG’s performance in the near term…

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