The spike in Treasury yields since the middle of March has put a dent in bond exchange traded funds (ETFs) as investors worry about inflation and the budget gridlock in Washington.
Yields on the 10-year note have jumped to about 3.6% after dropping below 3.2% last month. Bond prices and yields move in opposite directions.
The action in Treasury markets has weighed on ETFs such as the roughly $3 billion iShares Barclays 20+ Year Treasury Bond Fund (NYSEArca: TLT).
The ETF weakened in Thursday’s premarket to nearly $90 a share and was down nearly 2% for the week ended April 6, according to Morningstar.
The possibility of a government shutdown is triggering concerns over U.S. debt. [Treasury ETFs Pressured As Budget Deadline Looms.]
With more investors turning bearish on Treasury bonds, ETF providers are rolling out products designed to profit from higher rates. [ProShares Launches Inverse Treasury ETFs.]
iShares Barclays 20+ Year Treasury
