Investors who are worried about inflation should consider dividend exchange traded fund strategies.
Both the consumer-price index and the producer-price index have increased faster than expected, weighing on broad swathes of both the equity and fixed income markets and contributing to the heightened volatility in recent weeks. Many fear that high inflation will force the Federal Reserve to cut back on its accommodative momentary policies and hike interest rates sooner rather than later. With higher rates, the current value of future profits is reduced, which drags on stock valuations.
However, dividend-paying stocks have outperformed non-dividend payers as traders adjust to a potentially rising inflation environment. According to Evercore data, there is a close correlation over the last decade between inflation expectations, the 10-year Treasury yield, and the relative performance of high-dividend stocks, Barron’s reported.
More and More Mutual Funds Are Being Converted to Active ETFs etftrends.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from etftrends.com Daily Mail and Mail on Sunday newspapers.
Index funds emerged from the world of mutual funds in the early 1970s, and two decades later they helped create the first exchange-traded funds. Now, in the latest asset management evolution, some mutual funds are converting into ETFs in what could be the start of a trend across Wall Street. In the process, money managers embracing the new wrapper are set to accelerate the shift of assets into the already rapidly growing ETF industry.
History Made as First Mutual Fund Converts Into an ETF wealthmanagement.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from wealthmanagement.com Daily Mail and Mail on Sunday newspapers.