The ETF Portfolio Strategist: 19 Feb 2021

In this issue:

  • Inverse together: interest rates rise and (most) stock markets fall
  • Portfolio strategy benchmarks take a hit after two weeks of gain

US equities on the defensive as Treasury yields continue to rise: Maybe it wasn’t solely about the ongoing upswing in rates, but it probably didn’t help. Whatever the reason(s), US shares fell 0.7% this week through Friday’s close (Feb. 19), based on Vanguard Total US Stock Market (VTI). The ETF posted its first weekly decline in three weeks. That still leaves the fund close to a record high, which was set only a week ago. But with interest rates rising, and showing an increasingly robust upside trend, the burning question is: How much tolerance can equities muster if the reflation trade for yields rolls on?

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