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Daniel Straus HAP Floating Rate Bond ETF HFR-T PAST TOP PICK Nov 23, 2017

(A Top Pick Jun 29/17, Up 1%) We considered the risk of this ETF to be as low as the bond market. It is boring. You can get 1-2% yield coming out of it. It is a safe, boring investment.

Daniel Straus

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PAST TOP PICK

(A Top Pick Oct 6/16. Up 3%.) Has a lot of this. It’s a great place to park money. You don’t have the duration risks that you have with the other bond ETF’s. It will do better than a Money market.

BUY

Where to park cash in an ETF? He uses HFR-T. It's very short term, like 2-3 months in bond duration. Very little volatility with this. The price never moves much, sticking around $10

BUY

Where to put CASH? For floating rate notes, the coupon payment goes up as it adjusts. HFR-T is an ETF for this. It is an actively managed ETF. He just put 10% of one portfolio into this.

BUY

Is there a short-term ETF to park your cash and earn a little yield? HFR-T and ZST.L-T earns up to 2%. He uses both.

BUY

Has a whole bunch. Price moves very little. Has held it for years. Good place to park money. Dividend around 2.25%.

BUY

This is swap based which is not exactly like just buying a bond. There is an exchange of the rate of the return. A good place to park your money while getting yield.

DON'T BUY

Floating rate notes are not much better for a rising rate environment. You want short term inflation indexed notes. With all this money printing going on we will get a secondary inflation hit the year after next.

COMMENT

He has recommended this before, but it too was hit hard when the market declined. He asked one of the big bond desks about liquidity issues and when they said it was drying up, he sold out. What people need to understand is that bonds trade over the counter, not through an exchange. When the liquidity drives up, this negatively impacts bond values.

DON'T BUY

It holds ultra-short term investment-grade bonds. MER is 40 basic points. The chart was smooth pre-COVID, then plunged 20% during the sell-off, then recovered. When times are calm, they act like bonds. When risk spikes in a crisis, there's volatility. This falls in line with your equities. He's surprised this had this much of a correction. Something to be aware of. This isn't sovereign debt. Consider sovereign instead.

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Daniel Straus HAP Floating Rate Bond ETF HFR-T PAST TOP PICK Nov 23, 2017

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