What are the countries with the highest inflation rates in the world?  Inflation is one of the indicators of a country’s economic state, representing a percentage change in the general level of prices for goods and services paid by consumers (for consumer price index) and producers (for producer price index). A higher inflation rate means lower […]

Investor appetite for bonds doesn’t seem to be letting up anytime soon and as the “recession” word keeps popping up in the financial markets, it will continue this way for quite some time. For investors looking to build a proper bond portfolio, they can look at ETFs that have earned Morningstar’s Gold rating.

Bond fund outflows continue, as seen in funds such as the iShares 20+ Year Treasury Bond ETF (TLT B-). Whether or not this will continue was a segment on Monday’s ETF Edge show with CNBC’s Bob Pisani.

With the Federal Reserve backing a looser monetary policy, bond ETF investors will have to contend with an eventual rise in inflation. Market measures of inflation expectations have increased in recent weeks after receding fears of a near-term recession and growing preferences for riskier assets, the Wall Street Journal reports. Based on the spread between the yields of 10-year U.S. government debt and Treasury inflation-protected securities of similar maturity, investors expectations for the average inflation rate over the next 10 years has risen to about 1.7 percentage points, compared to 1.55 percentage points at the end of last month.

The feeding frenzy on bonds in 2019 saw an unprecedented appetite for safe haven debt like Treasury notes, which subsequently pushed yields down to record levels. To some market experts, that appetite is just the tip of the iceberg.

Treasury inflation-protected securities and related ETFs have seen increased interest as the Federal Reserves hints at looser monetary policies ahead. So far this month, the iShares TIPS Bond ETF (NYSEArca: ...

With the Federal Reserve backing a looser monetary policy, bond ETF investors will have to contend with an eventual rise in inflation.

For investors looking to build a proper bond portfolio, they can look at ETFs that have earned Morningstar’s Gold rating. "Be sure to start building your bond-fund portfolio with core, intermediate-term funds that give you a lot of diversification in a single holding," said Morningstar director of personal finance Christine Benz. "Fixed Income Instruments" include bonds, debt securities and other similar instruments issued by various U.S. and non-U.S. public- or private-sector entities.

Market expectations for inflation have increased lately on upbeat October consumer inflation data, global policy easing including by the Fed, a soaring stock market and easing recessionary fears.