Treasury yields have ticked higher from the summer low as central bank stimulus has improved sentiment and nudged investors into riskier assets. Bond ETF investors can protect themselves from rising interest rates by moving into funds with shorter durations, while ETFs that short Treasuries are a more aggressive play.
Yields on the 10-year Treasury nearly touched 1.9% earlier this week after bottoming around 1.4% in July. Bond prices and yields move in opposite directions.
“We had seen a huge rally in risk markets up to the end of last week. We seem to have taken a bit of a pause for breath now as the market assesses the impact of ECB and Fed measures,” RIA Capital Markets bond strategist Nick Stamenkovic said in a Reuters article.
Nevertheless, Stamenkovic projects yields will hit 2% at the end of the year. [Treasury ETFs: Flight from Safety]
Investors worried about the impact of rising rates can consider bond ETFs with shorter durations.