Despite calls for rising interest rates, the recent bout of volatility triggered a massive shift into safe-haven assets, bolstering long-term fixed-income assets and bond-related ETFs.
Among the best performing non-leveraged, long-only bond ETFs of the past month, the PIMCO 25+ Year Zero Coupon US Treasury Index ETF (NYSEArca: ZROZ) rose 4.3%, Vanguard Extended Duration Treasury ETF (NYSEARCA:EDV) gained 4.2% and PIMCO 15+ Year U.S. TIPS Index ETF (NYSEArca: LTPZ) added 3.3%.
The PIMCO 25+ Year Zero Coupon US Treasury ETF tries to reflect the performance of the BofA Merrill Lynch Long US Treasury Principal STRIPS Index. Treasury STRIPS or Separate Trading of Registered Interest and Principal of Securities are debt securities sold at a significant discount to face value and offer no interest payments because they mature at par. ZROZ comes with a 2.76% 30-day SEC yield, a 27.42 year effective duration and a 0.15% expense ratio.
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The Vanguard Extended Duration Treasury ETF tries to reflect the performance of the Bloomberg Barclays U.S. Treasury STRIPS 20–30 Year Equal Par Bond Index, which also includes a debt profile that provides exposure to the long-term Treasury STRIPS market. The fund shows a 3.01% 30-day SEC yield, a 24.5 average duration and a low 0.07% expense ratio.