Best Bond ETFs for Rising Rates, Inflation

Investors interested in going down the yield curve has a number of options to gain broad exposure to short-term U.S. Treasuries. For instance, the iShares Short Treasury Bond ETF (NASDAQ: SHV) is comprised of U.S. Treasury obligations with a maximum remaining term to maturity of 12 months – SHV shows a 1.56% 30-day SEC yield and a 0.39 year duration. The iShares 1-3 Year Treasury Bond ETF (NYSEArca: SHY) tracks Treasuries with a one to three year maturity – SHY has a 2.13% 30-day SEC yield and a 1.92 year duration.

The BlackRock strategists also point to floating rate and inflation-linked securities to buffer against rising rates and inflation.

The iShares Treasury Floating Rate ETF (NYSEArca: TFLO), provides exposure to U.S. floating rate Treasury bonds, whose interest payments adjust to reflect changes in interest rates. TFLO shows a 1.45% 30-day SEC yield and a 0.01 year effective duration.

The iShares 0-5 Year TIPS Bond ETF (NYSEArca: STIP) tracks short-term U.S. TIPS, which are government bonds whose face value rises with inflation. STIP has a 3.76% 30-day SEC yield and a 2.53 year duration.

For more information on the fixed-income market, visit our bond ETFs category.