US10Y topping 2%? Here Are Three Treasury-related ETFs to buy

10-year Treasury Yield soars above 1.9% today. Analysts forecast it may top 2%.

Rate hike uncertainty has resulted in a volatile stock market and predictably higher treasury yields. We can look at 3 Treasury-related ETFs.

$iShares 20+ Year Treasury Bond ETF(TLT)$ tracks the ICE U.S. Treasury 20+ Year Bond Index. To put it simply, the ETF tracks the aforementioned index and holds bonds with maturities over 20 years, giving investors easy access to a diversified portfolio of long-term bonds.

Bond prices move in the opposite direction to yields: when TLT is going up, yields are going down, and vice versa.

NOTES: When you consider to buy TLT, it is important to consider the interest rates trends. Bond prices move inversely to the trend of interest rates. If you predict interest rates to rise, you’d better avoid TLT, which is more favorable in a lower interest rate environment. 

However, if you predict a falling interest rate, you can invest based off this idea. 

$ProShares UltraShort 20+ Year Treasury(TBT)$, a 2x inverse ETF, tracks the ICE U.S. Treasury 20+ Year Bond Index. As it’s an inverse ETF, it basically tracks the movements in the long term bond prices.

To be specific, the 20-year+ Treasury yields generally move in the same direction as 10-year Treasury yields. Therefore, if the US10Y goes up, TBT goes up; and vice versa.

The following chart shows the relationship between the 10-year Treasury yield, the 20-year Treasury yield, the 30-year Treasury yield and TBT for the last year.

NOTES: TBT is a levered product you can use to bet on rising interest rates. It gives you-2x exposure to daily moves in U.S. Treasury 20+ Year Bond. However, the -2x leverage also means greater compounding effects. If you consider buying TBT, you should be cautious about its leveraging feature and your holding time.

Given the current price of US10Y, you can keep an eye on TBT and try to find a good entry point.

$Vanguard Total Bond Market ETF(BND)$ tracks the Bloomberg Barclays Aggregate Float-Adjusted Index. Compared to the single 20+ year treasury bond performance, this index measures the performance of a wide spectrum of bonds, including government, corporate, and international dollar-denominated bonds.

NOTES: It’s acknowledged that bond ETs are sensitive to interest rate changes. BND is no exception. But with one of the most diversified portfolios, the fund has delivered solid performance for over a decade. And it may stay safe as it covers lots of government bonds.

Given the inflation and interest rate environment, the short-term performance of the fund is challenged, but may present a good buying opportunity.

The following chart shows the trends of the 3 ETFs over the last 6 months:

Do you have any Treasury-related ETFs?

Do you have plan to buy any after reading this article?

Leave your comment and let me know.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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  • sgirabin
    ·2022-02-10
    Come one guys, please give a proper comment
    Don’t just anyhow comment for a point
    Please like this comment so that I can get a point too
    Haha
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  • pekss
    ·2022-02-10
    For bonds, I prefer our Sovereign AAA bonds with yields up to 5% p.a.
    Reply
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  • Songa
    ·2022-02-10
    I am currently vested in Roundhill Ball Metaverse ETF. Holdong for long term.
    Reply
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  • Doge2theMoon
    ·2022-02-10
    Short tresury. Thanks to 4-5 hikes this year
    Reply
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  • xiaochoochoo
    ·2022-02-12
    !
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  • Qishun
    ·2022-02-11
    ETF for long term plan better🤓
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  • AlaRicUnagi
    ·2022-02-10
    Good read. 👍🏻
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  • Iky
    ·2022-02-10
    Great ariticle, would you like to share it?
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  • DanielSan
    ·2022-02-14
    👍
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  • DanielSan
    ·2022-02-14
    ETF
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  • 60ec1805
    ·2022-02-10
    [微笑][微笑]
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  • Hehehaha0088
    ·2022-02-10
    😁
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  • sk5589
    ·2022-02-10
    [smile]
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  • Shen84
    ·2022-02-10
    👍
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  • albert77
    ·2022-02-10
    nice
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  • Xueni1228
    ·2022-02-10
    [Cool]
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  • wahpiangle
    ·2022-02-10
    gogo
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  • 10AngelV17
    ·2022-02-10
    [微笑]
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  • me168
    ·2022-02-10
    [Like]
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  • Whiteowl88
    ·2022-02-10
    Ok
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