The iShares Barclays 20+ Year Treasury Bond has bounced within a range recently, looking for its next big move.
Treasury ETFs are being buffeted by the inflation/deflation debate, concerns over Europe’s sovereign bond crisis and uncertainty surrounding the U.S. debt limit.
“Despite the absence of credit risk, this fund and the underlying index are highly exposed to interest-rate and inflation risk because of its long duration,” Morningstar analyst Timothy Strauts wrote in a profile of iShares Barclays 20+ Year Treasury Bond.
“That is, if inflation or the real rate of return demanded by the market rise, the price on this fund will drop until the yield is high enough to reflect the current market sentiment,” he said. “Conversely, in times of market turmoil, the value of this fund should rise as investors flock to safety.”
The ETF is sitting near its 50-day moving average.
iShares Barclays 20+ Year Treasury Bond
Chart source: StockCharts.com.