In market turmoil, there are several areas that tend to see greater investor interest. You can count Treasury bond exchange traded funds (ETFs) among them – especially in the last few days, which have seen down markets.
The eurozone crisis has pushed Treasury prices higher as investors bet that inflation will remain low for some time. Yet again, investors are seeking low-risk U.S. government debt as the euro dropped and stocks slid on ongoing concerns that struggling euro-zone nations will be unable to lock in the spending cuts and tax increases that are needed to reduce their deficits, reports Deborah Lynn Blumberg for The Wall Street Journal.
Some of the biggest gainers today include Vanguard Extended Duration ETF (NYSEArca: EDV), iShares Barclays 20-Year Treasury Bond Fund (NYSEArca: TLT) and PowerShares 1-30 Laddered Treasuries Portfolio (NYSEArca: PLW). [Bond ETFs: The Impact of Higher Rates.]
Bear in mind that while investors flee to safe havens like Treasuries, there’s a trade-off for that protection in the form of even lower yields. The markets are at a tipping point right now while investors sort out whether the rally in the last year was too much, too soon or if this is merely a pause for breath. [Build America Bond ETFs Get Another Play.]
For more stories about Treasury bonds, visit our Treasury Bonds category.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.