Post by
CrazyTrader on Aug 15, 2024 1:03pm
Historical trading pattern of Prefer ETFs such as CPD,HPR...
If you go way back and Chart these Prefer ETFs with Central Bank rates you will see a correlation. When rates go down, ETFs go down. When rates go up, ETFs go up.
If you go way back you will see the trend was DOWN DOWN DOWN DOWN.
Suddenly something CHANGED in 2022. RATES started to rocket up..... BUT these ETFs went DOWN!!!!! What happened?????
In 2022 the yield curve inverted. Suddenly everything was upside down.
While rates are heading down, the inverted yield curve isn't correcting, instead as you all notice, the 5yr BoC rate just tanking.
All just my opinion/view/thinking that everything just CRAZY
Comment by
SONOFFERGUS on Aug 15, 2024 2:33pm
Hey CrazyWatcher Credit risk happened. Now that panic is over and long rates are dropping in the expectation of policy easing. The beautiful bit thing about BPO is that the bad news of lower resets is offset (and IMHO will be more than offset) by the increase in its creditworthiness as its borrowing costs drop and asset values climb.