Bond ETFs Breaking Out

Ten-year U.S. Treasury yields have surged over 39%, but a different tune has been sung over the past few days. Yields on ten-years have slid 8.2% as investors see a more sanguine outlook for bonds, predictably benefiting some of the largest bond ETFs in the process.

The iShares 20+ Year Treasury Bond ETF (NYSEArca: TLT) and the iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSEArca: LQD) are among the large bond ETFs that have recently made important technical breakouts, indicating more upside could be on the way, as technical analyst Chris Kimble notes.

With 10- and 30-year yields being rebuffed at important resistance points, the iShares Core Total U.S. Bond Market ETF (NYSEArca: AGG) and the SPDR Barclays High Yield Bond ETF (NYSEArca: JNK), the second-largest junk bond ETF by assets, have also made notable advances over the past few days. [Bond ETFs in a Post-Default World]

Performances for that quartet over the past five days have been strong as TLT is up 3.4% and AGG is higher by 1.11%. JNK is higher by 1.2%, but the market has favored high-grade corporates as LQD is up almost 2%. [Another Look at Junk Bond ETFs]

Still, flows data are mixed for those ETFs. In the past week, investors have pulled $246 million from TLT and $193 million from LQD. In what may be a sign that risk appetite is incrementally rising in the debt markets, JNK has hauled in $403 million.

SPDR Barclays High Yield Bond ETF

ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of JNK, LQD and TLT.

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