Of course, investors trying to time a top in Treasury ETFs have been burned in recent years. [Treasury ETFs on the Precipice]
Still, income-oriented investors shell-shocked by the subprime meltdown and Europe’s debt crisis have been forced to accept the rock-bottom yields that Treasury ETFs are offering. Aside from the risk of a jump in Treasury yields, they could also be hit by rising inflation, which hurts bonds.
“We are literally running out of superlatives to describe how much we hate bonds,” money manager GMO says in its latest quarterly update released Thursday, CBS MoneyWatch reports. “Yields are pitiful, dangers of even a slight recovery that could wreak havoc for long-duration portfolios loom, and monetary policies globally certainly have added to the specter of rising yields.”
iShares Barclays 20+ Year Treasury Bond