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BND

Bond Market ETF (BND) Hits New 52-Week Low

For investors willing to stay away from potential losses, Vanguard Total Bond Market ETF ( BND ) is probably on the radar now. The fund just hit a 52-week low, and shares of BND are down roughly 4.2% from their 52-week high price of $84.35/share.

Are more pains in store for this ETF? Let's take a quick look at the fund and its near-term outlook to get a better idea of where it might be headed:

BND in Focus

BND provides exposure to the broad investment-grade bond market in the U.S., including government, corporate, and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities all with maturities of more than one year. BND charges investors 8 basis points a year in fees and invests 43.5% of its asset base in Treasuries, 20.4% in government mortgage backed securities and 15.9% in industrial bonds (see all Total Bond Market ETFs here).

Why the Move?

The U.S. bond market has been an area to watch lately given the widespread sell-off in Treasury bonds on concerns of a possible interest rate hike in December by the Fed following stellar jobs report for October and the Fed Chairwoman Janet Yellen's affirmative view on the same. The Treasury sell-off sent the yields on two-year notes to a five-year high and on benchmark 10-year notes to nearly a four-month high yesterday.

More Pains Ahead?

BND has a negative weighted alpha of 2.30 . A negative weighted alpha indicates the fund's likelihood to generate losses. So, it is better to stay away from this fund until the situation in the bond market stabilizes and a clearer picture regarding the interest rate movement emerges.

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VANGD-TOT BOND (BND): ETF Research Reports

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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