AGG ETF

Fixed income investors who have the majority of their portfolio in bonds are facing a heavy dose of uncertainty heading into 2025. That said, NEOS Investments has four options for income that also combines tax efficiency.

The real estate cycle will finally transition from the "Recession" phase to the "Recovery" phase in 2025. Muted supply growth will be the silver-lining to the brutal three-year bear market. False Start: REITs surged 20% leading up to the Fed's initial "jumbo" interest rate cut in September, but have hit the skids once again since the rate cuts actually began. Historically Cheap: REITs have underperformed the S&P 500 by a whopping 45 percentage points since the start of the Fed hiking cycle in 2022 - a historically remarkable underperformance gap.

These ETFs have long-term merit despite a rocky year so far.

Have you checked on your fixed income allocation lately? It's one thing to buy an ETF tracking the Bloomberg US Aggregate Index, (BBUSATR), or the AGG.

Advisors and investors have long turned to active management for fixed income exposure. They are increasingly favoring ETFs to access the markets.

U.S. equity markets climbed to fresh record-highs while benchmark interest rates dipped sharply, as investors parsed inflation data and deliberated the potential implementation and impacts of Trump Administration policies. Markets cheered the nomination of Scott Bessent for US Treasury Secretary, reflecting expectations that the implementation of hawkish trade and immigration policies would consider the impacts on U.S. financial markets. Extending its post-election gains to around 6%, the S&P 500 advanced another 1.2% this week. The Small-Cap 600 gained 1.1% this week - lifting its post-election gains to over 10%.

The biggest ETFs got bigger.

Economic growth estimates are stabilizing, with healthy retail sales and job market improvements, suggesting a decent US GDP growth heading into 2025. I maintain a buy rating on AGG, as its yield is significantly higher than cash accounts, despite inflation risks and Fed policy uncertainties. AGG offers broad exposure to investment-grade bonds with a yield to maturity of 4.85%, making it attractive relative to historical averages.

Today is Veterans Day. My father served in the army during the Vietnam War.