Where BlackRock’s Chaudhuri sees opportunity in bond ETFs as investors eye inflation
U.S. inflation appeared on the “right path” in October, but bond yields have risen over the last few weeks on expectations that policies under the next White House administration will be “net-inflationary and boost growth,” according to BlackRock’s Gargi Chaudhuri.
“President-elect Trump has proposed a wide range of tariffs, including 60% on China and 10% to 20% universal tariffs,” said Chaudhuri, BlackRock’s chief investment and portfolio strategist for the Americas, in emailed comments Wednesday. “While implementation is uncertain, this stance could reinforce geopolitical and economic fragmentation, a structural factor we see keeping inflation higher in the medium term.”
For inflation protection, she pointed to the iShares 0-5 Year TIPS Bond ETF as an investment strategy within fixed income to help navigate “a higher inflationary environment caused by shifting government policies.” She also suggested “finding income in the front end of the yield curve at current levels” with the iShares Short Treasury Bond ETF, and extending duration to three to seven years with a fund like the iShares 3-7 Year Treasury Bond ETF.