Safety Dance: Treasury ETF Hits New All-Time High

July 16th at 11:04am by John Spence

An ETF indexed to long-term U.S. government debt rose to a fresh record high Monday as yields on the 10-year Treasury note touched a low of 1.44% on the safe-haven trade.

The iShares Barclays 20+ Year Treasury Bond Fund (NYSEArca: TLT) rallied about 1% to a new lifetime high of $130.57 a share.

Heading into Monday’s action, the Treasury ETF delivered a year-to-date total return of 8%, according to Morningstar.

Strong government debt auctions last week pushed Treasury yields lower and bond prices higher.

Treasury ETFs are rallying on the Eurozone debt crisis and worries over U.S. economic growth.

“Investors are focused on holding high-quality bonds, like Treasuries, as policy makers focus on accommodative policy and because of the problems in Europe,” said Piet Lammens, head of research at KBC Bank, in a Bloomberg News report. “What Bernanke says this week will be closely watched. We need to see a stronger indication that more stimulus is coming before the Treasury yields can make new lows.”

Federal Reserve chief Ben Bernanke is set to testify later this week before Congress on the U.S. economy.

iShares Barclays 20+ Year Treasury Bond Fund

Full disclosure: Tom Lydon’s clients own TLT.

The opinions and forecasts expressed herein are solely those of John Spence, 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.

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