For investors seeking momentum, the iShares Agency Bond ETF (AGZ) is probably on the radar now. The fund just hit a 52-week high and is up 3.4% from its 52-week low price of $107.29 per share.
But are there more gains in store for this ETF? Let’s take a quick look at the fund and its near-term outlook to get a better sense of where it might head.
AGZ in Focus
It offers exposure to U.S. agency bonds, which are issued by government-sponsored enterprises such as Fannie Mae and Freddie Mac. The product charges 20 basis points (bps) in annual fees (See: All Government Bond ETFs here).
What Led to the Rise?
Rising uncertainty surrounding the U.S. government shutdown, frequent trade frictions between the United States and China, and fear of a market correction among some economists to hit the stock market soon have been boosting fixed-income instruments, such as bond ETFs, lately. A lower interest rate environment also boosts the market value of fixed-income securities like those held by AGZ. Cumulatively, these factors might have resulted in a fresh 52-week high for AGZ.
More Gains Ahead?
AGZ may continue its strong performance in the near term, with a positive weighted alpha of 2.30 (as per Barchart.com), which suggests a further rally.
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iShares Agency Bond ETF (AGZ): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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