In a wild 4 week period, stocks and US Treasury bonds have experienced double digit swings that resulted in the two asset classes ending about where they began.
The Vanguard FTSE All-World ETF (VT) declined 9% before climbing 12% to finish the past 4 weeks up 3%. Over the same time period, theBarclays Capital 20+ Year Treasury Bond Fund (TLT) soared 10% before giving most of those gains back to finish the 4 week period up 1%.
Rising and falling anxiety levels over the European financial crisis is the major cause of the large swings in asset prices. If the new found confidence falters, then another change in direction for stocks and treasuries would not be surprising.
VT tracks the FTSE All-World Index. The index includes approximately 2,900 stocks of companies in 47 countries. The expense ratio for the $1.3 billion ETF is 0.25%.
TLT tracks Barclays Capital 20+ Year Treasury Bond Fund index. The expense ratio for the $3.3 billion ETF is 0.15%.
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– ETF MarketPro Staff
October 17, 2011