Signs of a US economic slowdown have prompted calls for a dovish pivot by the Federal Reserve. The recent decision by the Federal Open Market Committee (FOMC) to keep rates unchanged was quickly followed by a disappointing US non-farm payroll print. As a result, markets have priced in the possibility of as many as five cuts to the Fed funds rate, totaling 1.25%, by the end of the year [5a59e726]. In light of this scenario, here are five ETFs that investors may consider:
1. iShares $ Treasury Bond 20+yr UCITS ETF (DTLA): This is the largest ETF providing exposure to long-dated US government bonds.
2. Xtrackers S&P 500 Equal Weight UCITS ETF (XDEW): This ETF equally weights the constituents of the S&P 500, providing a tilt towards mid-caps.
3. Amundi US Curve Steepening 2-10Y UCITS ETF (STPU): This ETF offers investors a technical instrument to play the normalization of the US Treasury yield curve.
4. Xtrackers USD High Yield Corporate Bond UCITS ETF (XUHY): This ETF focuses on high-yield corporate bonds, which may become attractive as the prospect of rate cuts leads to wider spreads.
5. iShares US Property Yield UCITS ETF (IUSP): This ETF targets the real estate sector, which could benefit from a potential comeback as interest rates are hampered [5a59e726].