U.S. Treasury bond exchange traded funds maintained their momentum Monday, with yields on benchmark 10-year notes nearing record lows, as investors continued to jump into safe-haven assets following the United Kingdom’s vote to leave the European Union.
The PIMCO 25+ Year Zero Coupon US Treasury (NYSEArca: ZROZ) was among the best performing non-leveraged ETF Monday, surging 4.7%.
Meanwhile, yields on benchmark 10-year Treasury notes declined by 12.4 basis points to 1.456% mid-Monday. The yield’s record closing low was 1.404% on July 2012.
Investors have been shifting to safety plays from riskier assets in a bid to preserve capital as a result of the U.K.’s decision to break away from the E.U.
“The bond market is saying that the risk to global [economic]growth has increased,’’ Aaron Kohli, interest rate strategist at BMO Capital Markets, told the Wall Street Journal. “There are many questions about how [the Brexit issue]actually is going to evolve.’’
Moreover, depressed yields overseas, where some government debt is already trading at negative yields, have also pushed more foreign investors into relatively more attractive U.S. Treasuries.