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Even as Rates Fall, This Short Duration ETF Still Matters
Etftrendsยท 2025-10-27 12:39
Group 1 - The Federal Open Market Committee (FOMC) is expected to lower interest rates by at least 25 basis points in its upcoming meeting [1] - Dovish moves by the U.S. central bank lead fixed income investors to consider longer-dated bonds, but shorter duration ETFs like Neuberger Berman Short Duration Income ETF (NBSD) remain valuable [2][5] - The NBSD ETF, which has a weighted average duration of 2.08 years, offers a 30-day SEC yield of 5.01%, making it an attractive alternative to cash as interest rates decline [4] Group 2 - Short duration bonds provide potentially higher returns than cash, lower volatility, and liquidity, making them appealing to investors, especially in a declining interest rate environment [5] - Following a significant bond sell-off in 2022, investors are shifting focus to short duration bonds, which offer a safer option during market volatility [6] - Short duration bonds reflect central bank interest rate policies, providing more stability and predictability in yields [7]