1Año·

Hello all,

again and again one stumbles across the recommendation to participate in the high (key) interest rates in the USA by buying government bonds or corresponding ETFs. Now I am looking at e.g. $IB01 (+0,15 %) (iShares USD Treasury Bond 0-1 year) or $ZPR1 (+0,13 %) (SPDR Bloomberg 1-3 Month T-Bill) and don't see how this will succeed....

Thanks in advance for explanations

8 Comentarios

Stuttgarter81@Moneymoney

1Año

The exchange rate also has an impact.

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Epi@Epi

1Año

Bond ETFs work differently than bonds because they don't hold the bonds to the end. If you buy bonds and hold them to the end, you always get 100% back. So the price fluctuations don't matter. ETFs take full advantage of the price fluctuations. If you want to profit from the ECB key interest rates, $XEON is probably best.

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Alex@AlexBloch

1Año

Short-term bonds < 1 year are almost directly linked to the key interest rate level, i.e. high (key) interest rates also result in a high guaranteed interest coupon. Bond ETFs have in addition to the interest coupon (the amount depends on the time of purchase) also a fluctuating price, which depends on the development of the key interest rates. I.e. depending on the purchase price one makes afterwards a price profit or loss, depending on the time of sale. (This price risk is much lower for short-dated bonds than for long-dated bonds, no matter if from Europe or the US). If US interest rates are at their highest now and may fall again soon, then you still get a high interest coupon now, but there is a price increase at the same time, since bond prices always rise when high key interest rates stagnate or are likely to fall soon. One misses a favorable purchase time now, if one waits still longer and the US interest rates possibly sink. In the case of US Treasuries 0-1, June/July would have been the perfect time to buy at the lowest price, because prices have only risen since then (precisely because US interest rates have probably already peaked since then).

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1Año

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Stefan@stx12

1Año

OK, that is, one would be well off in the future when interest rates fall. But that is not the same as profiting from (now continuously) high interest rates...

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1Año

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Stefan@stx12

1Año

@Mauromar I just don't see where the "yielding interest" is reflected. Look at the examples above. They are falling in value, even though they track an index of very short-term bonds.

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Alex@AlexBloch

1Año

@stx12 see my longer explanation in the main thread 😉

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