Bond Expert Bob Smith Owns TLT. He's Not Bullish on It

In this episode of Exchange Traded Fridays, Bob Smith, president and co-chief investment officer at Sage Advisory Services, sits down with etf.com senior analyst Sumit Roy and etf.com wealth management editor Jeff Benjamin to discuss the recent moves and future outlook for the fixed income markets.  
 
Smith owns the hugely popular iShares 20+ Year Treasury Bond ETF (TLT), which has inflows of more than $20 billion so far this year. But he’s not particularly bullish on the ETF, which holds some of the most interest-rate-sensitive Treasury bonds available.   
 
“People are feeling that we are [close to] a pivot in the interest rate cycle” and they are timing the market by buying TLT, explained Smith, who added that it’s “premature” to be doing so. 

Smith dove deep into why he believes that the long-term outlook for the Treasury bond market is challenging, with U.S. federal debt and deficits set to explode. However, he still owns TLT in some of his portfolios.  

Bob Smith co-founded Sage in 1996 and serves as the firm’s President and Co-Chief Investment Officer, and he leads the Investment Committee. He began his career in 1970 at Moody's Investors Services as a member of the Corporate Bond Rating Committee; he then went on to Loeb, Rhoades & Co. to cover the insurance industry in the institutional equity research department. He later worked at Merrill Lynch & Co. for 13 years in a variety of institutional research, trading and portfolio management roles in New York and London. During this period, he was assigned to the Saudi Arabian Monetary Agency as a Resident Financial Advisor in Riyadh responsible for managing the foreign reserves of the Central Bank.