By: Dr K C Gupta

SENTIMENTS

AAII Bull-Bear Spread -5.2% (below average). (Thursday-Wednesday)
$NYA50R, NYSE %Above 50-dMA 72.43% (overbought)
$SPXA50R, SP500 %Above 50-dMA 73.00% (overbought)
Delta MSI 66.8% (positive)
ICI Fund Allocations (Cumulative), 5/31/25
OEFs & ETFs: Stocks 60.61%, Hybrids 4.16%, Bonds 17.70%, M-Mkt 17.54%

INTEREST RATES

CME FedWatch
Cycle peak 5.25-5.50%
Current 4.25-4.50%
FOMC 7/30/25+ hold
FOMC 9/17/25+ cut

Treasury

T-Bills 3-mo yield 4.39%, 1-yr 3.97%; T-Notes 2-yr 3.73%, 5-yr 3.83%, 10-yr 4.29%; T-
Bonds 30-yr 4.85%;
TIPS/Real yields 5-yr 1.52%, 10-yr 2.00%, 30-yr 2.57%
FRNs Index 4.240%
US Savings I-Bonds rate from 5/1/25 – 10/31/25 is 3.98% (previous 3.11%); the fixed
rate is 1.10%, the semiannual inflation is 1.43%.
For current banking rates, see www.depositaccounts.com/
Stable-Value (SV) Rates, 7/1/25
TIAA Traditional Annuity (Accumulation) Rates
Restricted RC 5.25%, RA 5.00%
Flexible RCP 4.50%, SRA 4.25%, IRA-101110+ 4.50%
TSP G Fund pending (previous 4.500%).
Weekly ETFs INDA +3.64%, EPI +3.57%, INDH +2.30%, SPY +3.47%
The data above are as of Sunday preceding the publication date.

MARKETS

ISRAEL-IRAN mini-war (June 12-23, 2025) ended soon after the US “Daddy” joined the
bombing raids on Iran on 6/21/25 & declared a ceasefire that seems to be holding.
Many lives were lost & there was a lot of damage to military facilities & infrastructure.
Global stock markets were resilient. Oil rose & fell; gold didn’t react much.
ECONOMY

Trade talks for FTAs between India & the US, UK, EU are continuing. India-US trade
agreement may not be done by July 9 & only a general agreement may be announced.
Points of contention are that in exchange for lowering tariffs, India wants access to
advanced US technologies & commitments from US companies on technology transfers
& local productions (in India), but the US sees that conflicting with its America-First
push.

FUNDS

Mutual fund (MF) industry in India is rapidly evolving. Several domestic & foreign
companies, including some joint-ventures, are operating in this growing area. People
buy them directly from MF firms (Direct Plans) or through advisors/brokers (Regular
Plans). MF fees (TERs or ERs) are quite high but that will change as the industry grows.
Structurally, the public MFs in India are distinct from retirement/pension funds &
insurance funds. MF assets have grown to 31% of bank deposits. Traditionally, the
Indian investors have stuck with real estate, gold & bank accounts/CDs. For
comparison, the US MF assets are 153.26% (115.40% excluding money-market funds)
of the bank deposits; the US ETF assets 57.10%.

SPECIAL TOPICS

Defense Ministers meeting at SCO in Qingdao, China failed to agree on a joint
declaration due to objections from India.

A second Indian in space, Shubhanshu Shukla, is visiting International Space Station
(ISS) for 2 weeks. There have also been several Indian-Americans in space including
Kalpana Chawla, Sunita (Suni) Williams (who was stuck at ISS for months instead of
planned 2 weeks), etc.

TARGET-DATE FUNDs (TDFs)

TDFs are popular in workplace retirement plans (401k/ 403b/ 457) as these are allowed
as default choices for auto -signup & -escalation. They are also available for use
elsewhere in taxable & IRA accounts. These are funds-of-funds of active, passive or
mixed funds that follow age-dependent GLIDE-PATHS of different tilts – conservative,
moderate, aggressive.

Most firms include only their own/ in-house funds, so the TDFs become attractive as
feeder funds for firms’ other funds. Some firms include both in-house & external funds
but these tend to be expensive. TDFs can be listed mutual funds (OEFs; regulated by
the SEC) or cheaper, unlisted collective investment trusts (CITs; regulated by the OCC).

There are “Through” TDFs that have about 50-50 allocation at the retirement date &
then the equity allocation continues to decline to 20-40% over the subsequent 5-10
years; some firms eventually terminate & merge the series into a retirement-income
fund. On the other hand, “To” TDFs become most conservative at the retirement date &
the equity allocation remains unchanged in subsequent years.

There are various models for retirement plan fees – all-in-one fees or itemized fees (plan level, top TDF level, underlying funds). Many plans have been sued recently by employee or external lawyer groups for not including the cheapest fund classes in plan TDFs; after all, plans have millions/ billions in assets, so it is not reasonable for firms to include only expensive classes of funds within their TDFs.

SECURE Act 1.0 (2019) allowed annuitization option in company 401k at retirement
within the framework of TDFs. These products require agreements between the fund
firms & insurers. Rollout has been slow but now several firms are involved. Annuities
have existed within school/ university/ nonprofit 403b for many years.
For more information, see https://ybbpersonalfinance.proboards.com/