How to buy US treasuries? Bond ETFs!
As market volatility intensifies and the US dollar strengthens, US Treasury yields has reached its highest point since October, reaffirming the "higher for longer" sentiment following the release of the Federal Open Market Committee (FOMC) minutes.
The year 2023 has posed challenges for US treasuries, with events like the debt ceiling and rate hikes impacting their performance.
Amid these dynamics, investors are contemplating whether it's an opportune moment to consider bottoming out US treasuries. Notably, prominent investors hold divergent views on this matter.
Bottom US Treasuries or not? Buffett, Musk and Ackman are divided
Elon Musk, the CEO of $Tesla Motors(TSLA)$ , believes that investors stand to gain considerably at the shorter end of the US Treasury yield curve. Musk expressed his confidence in investing in short-term Treasury bills, emphasizing their promise as a sound option.
Musk's statement was prompted by Bill Ackman, the founder of Pershing Square Capital Management. In a recent announcement, Ackman disclosed his company's substantial short positions in 30-year US Treasury bonds.
This strategy serves both as a hedge against the impact of rising interest rates on stocks and as a standalone bet. Furthermore, Ackman highlighted that his company is managing its cash flow through short-term Treasury bills.
Warren Buffett buys treasuries. Bill Ackman sells them. What to do. - YouTube
Buffett, in response to the recent downgrade of the US credit rating by Fitch, emphasized that Berkshire's acquisition of US Treasuries remains business as usual. He revealed that Berkshire purchased $10 billion of US Treasuries one week and an additional $10 billion the following week. This move reflects the ongoing commitment to Treasury purchases despite the recent market shifts.
How to buy US Treasuries? Buy these bond ETFs!
$Vanguard Total Bond Market ETF(BND)$ $iShares Core U.S. Aggregate Bond ETF(AGG)$ $iShares 20+ Year Treasury Bond ETF(TLT)$ $iShares 7-10 Year Treasury Bond ETF(IEF)$ $Direxion Daily 20+ Year Treasury Bull 3X Shares(TMF)$
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