Group 1 - The article analyzes the iShares Treasury Floating Rate Bond ETF managed by BlackRock, which aims to replicate the Bloomberg US Treasuries Floating Rate Index [1] - The fund consists of US Treasury bonds with floating rates and associated coupons [1]

M Morgan Stanley Research: Key Forecasts Next 12 Months Outlook: Our High-Conviction Calls Skewed to the Downside: The broad imposition of tariffs by the US is a structural shock to the global trading order. The tariffs themselves and the associated uncertainty will weigh notably on growth, but given the strong starting point coming into the year, we do not expect a global recession. Despite recent tariff announcements, we still expect baseline tariff rates to remain the same as our outlook, and we expect t ...

6 June 2025 | 10:11AM EDT Global Markets Daily: How Fiscal Risks Could Impact the Dollar (Rosenberg/Jenkins) How Fiscal Risks Could Impact the Dollar Fiscal sustainability has come into greater focus for investors, not only in the US, but in the UK and Japan as well. The timing of the budget process has led markets to focus on the US's large and persistent deficit at a time when investors were already eyeing the durability of foreign demand for US assets. This has led to some brief but sharp dislocations be ...

Investment Rating - The report indicates a positive investment sentiment towards US Treasuries, with strong inflows observed in this segment [2][4]. Core Insights - Global fund flows showed a net inflow into equities of $9 billion for the week ending April 23, an increase from $8 billion the previous week, driven by reduced outflows from US equity funds [4]. - In fixed income, net outflows were significantly reduced to $0.8 billion from $21 billion in the prior week, with government bond funds continuing to attract inflows [4]. - Emerging markets saw positive flows into mainland China funds, while Taiwan maintained strong net inflows [4]. - Cross-border FX flows turned positive, indicating an improved risk appetite among investors, favoring currencies such as USD, EUR, GBP, and CNY [4]. Summary by Category Equity Flows - Total equity inflows amounted to $68,079 million over four weeks, with a weekly inflow of $9,164 million [10]. - Developed markets saw inflows of $34,063 million, while emerging markets recorded inflows of $27,140 million, with mainland China leading at $24,686 million [10]. - Sector-wise, technology funds experienced the largest inflows of $14,845 million, while financials and healthcare saw significant outflows [10]. Fixed Income Flows - Total fixed income experienced outflows of $32,369 million, with government bonds attracting inflows of $29,366 million [10]. - High yield bonds faced substantial outflows of $23,488 million, while short-duration bonds saw inflows of $29,804 million [10]. FX Flows - Total FX flows recorded a net outflow of $4,751 million, with G10 currencies showing mixed results [12]. - The USD faced outflows of $3,440 million, while the EUR and GBP saw inflows of $2,880 million and $799 million respectively [12]. Fund Positioning - The report highlights a shift in fund positioning, with an increasing share of equity assets in total assets, indicating a growing preference for equities over fixed income [20][27]. - The share of money market fund assets as a percentage of global mutual fund assets has also seen fluctuations, reflecting changing investor sentiment [20].

Investment Rating - The report indicates a neutral investment stance with a BofA Bull & Bear Indicator reading of 4.8, slightly down from 4.9, suggesting a cautious approach to risk assets [7][48]. Core Insights - The report discusses the transition from "US exceptionalism" to "US repudiation," highlighting a significant shift in foreign ownership of US assets, with foreigners holding 33% of US Treasuries, 27% of US corporate bonds, and 18% of US stocks [1][10]. - The report emphasizes the impact of higher US yields leading to lower stock prices and a weaker US dollar, which is driving global asset liquidation [2][17]. - It suggests that the S&P 500 valuation floor of 20x has now become a ceiling, indicating a bearish outlook for US equities [1][25]. Summary by Sections Treasury Ownership - Foreign ownership of US Treasuries has reached 33%, with the financial sector holding 31% and the government 24% [3]. Market Flows - There was a significant inflow of $48.9 billion into equities, driven by a $70.3 billion inflow to passive funds, while bonds experienced a $20.8 billion outflow [11][26]. - The report notes the largest weekly inflow into Treasuries at $18.8 billion and the largest outflow from high-yield bonds at $15.9 billion [16][27]. Economic Indicators - The report indicates that the US household equity wealth has decreased by $8 trillion year-to-date, following a $9 trillion increase in 2024, reflecting a negative wealth effect [18][22]. - The S&P 500 is projected to be priced-in around 4800, with expectations of a short and shallow recession [22][25]. Investment Strategies - The report recommends being long on 2-year Treasuries and short on the S&P 500 until there is a significant policy response from the Federal Reserve or a resolution in the US-China trade tensions [2][17]. - It advises investors to focus on high-quality corporate bonds yielding 5-6%, equities with strong dividend yields, and to consider emerging markets and commodities as potential investments [25][26].