“We are unlikely to see US bond yields rise in isolation; we should expect a synchronized move higher once the global economy is fully recovering,” Zach Pandl, portfolio manager at Columbia Management, said in the article.
Some investors, though, are worried that the historically low rates in a rising inflationary environment could translate to lower or even negative real rate returns. Investors can hedge inflation through Treasury Inflation Protected Securities, such as the iShares TIPS Bond ETF (NYSEArca: TIP). TIP, which track government bonds whose face value rises with inflation, has a 7.74 year duration and a 3.75% 30-day SEC yield. The fund is up 6.5% year-to-date. [Fight Back Against Inflation with TIPS ETFs]
Vanguard Extended Duration Treasury ETF
For more information on the Treasuries market, visit our Treasury bonds category.
Max Chen contributed to this article.