Two bond ETF strategies that may help investors profit from rate hikes

Interest complaint jitters are meaningfully pushing investors to the shorter extremity of the output curve, according to Joanna Gallegos, co-founder of fixed-income ETF issuer BondBloxx.

Gallegos, erstwhile caput of planetary ETF strategy for JPMorgan, believes it's a dependable approach.

"It's an intuitive trade. This is not 2022. This is not adjacent 5 years ago. Yields are precise fundamentally different," she told Bob Pisani connected CNBC's "ETF Edge" earlier this week.

Gallegos predicted the Federal Reserve volition assistance rates by different 100 ground points.

"That's what the market's estimating ... until astir July. So, arsenic involvement rates are going up, radical are a small uncertain astir what's going to hap to enslaved prices truly acold out," she said. "If you spell retired connected the longer broadside of duration, you're taking connected much terms risk."

However, Main Management CEO Kim Arthur said helium finds long-term bonds attractive arsenic portion of a barbell strategy. Long-term bonds, helium said, are a invaluable hedge against a recession.

"It's a information of your allocation, but not the full part, because, arsenic we know, implicit the agelong haul equities volition importantly outperform fixed income," helium said. "They'll springiness you that ostentation hedge connected apical of it."

Gallegos, erstwhile asked whether the 60/40 stock/bond ratio is dead, said it was existent a twelvemonth ago, but not anymore.

"That was ... earlier the Fed accrued rates 425 ground points past year, truthful everything shifted successful presumption of yields twelvemonth implicit year," she said.

As of Friday's close, the U.S. 10 Year Treasury was yielding astir 3.7% — an 84% surge from 1 twelvemonth ago. Meanwhile, the U.S. 6 Month Treasury yield was astir 5.14%, which reflects a one-year leap of 589%.