Low-risk government debt is back in style as Europe’s banking woes, mixed in with the sour notes of North and South Korea’s relations have sent markets into a downward trend. Chris Reese for Reuters reports that weakness on Wall Street has led to a rise in 20-Year Treasury notes while European shares are being dumped. [Which ETFs Are Moving in Response to Europe’s Crisis?]
Matthew Craft for Forbes points out that long-term U.S. Treasury bonds were widely expected to be out of favor by now, a result of spiraling budget deficits, potentially rising interest rates and fed-up Chinese buyers. But as a result of these worries, the reverse has happened: bond prices are climbing and yields are coming back down. [What Rate Hikes Would Mean.]
The 10-year yield hit 3.19% Thursday afternoon before moving up to 3.22%. The yield touched 4% as recently as April 5. Bond traders do favor U.S. debt, as it is more tradeable than any other.
For more stories about Treasury bonds, visit our Treasury bond ETF category.
The list of leading ETFs in trading today is dotted with Treasury bond ETFs, indicating that investors are indeed fleeing to quality and safety:
- Vanguard Extended Duration ETF (NYSEArca: EDV)
- iShares Barclays 20-Year Treasury Bond Fund (NYSEArca: TLT)
- PowerShares 1-30 Laddered Treasuries Portfolio (NYSEArca: PLW)
- iShares Barclays 10-20 Year Treasury Bond (NYSEArca: TLH)
- iShares Barclayss 7-10Year Treasury (NYSEArca: IEF)
- Vanguard Long-Term Bond (NYSEArca: BLV)
Tisha Guerrero contributed to this article.
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.