With the debt ceiling drama over, investors are adding a bit of duration to their Treasury exposure. And while they’re not yet flocking to long-term Treasuries, they are going further out on the Treasury curve.
Investors looking to go more into the belly of the curve may want to consider the BondBloxx Bloomberg Seven Year Target Duration US Treasury ETF (XSVN). As its name suggests, XSEVEN invests in a portfolio of U.S. Treasury securities with a target duration of seven years.
XSEVEN is one of eight duration-specific U.S. Treasury ETFs that BondBloxx offers. These duration-specific Treasury ETFs seek to offer investors a more precise, lower-cost way to get exposure to U.S. Treasury Securities. The durations range from six months to 20 years.
The funds track a series of indexes developed by Bloomberg Index Services that include duration-constrained subsets of U.S. Treasury bonds with more than $300 billion outstanding. They’re also designed to track indexes that achieve target durations using U.S. Treasury securities, instead of specific maturities or maturity ranges.
BondBloxx was launched in October 2021 to develop precision fixed income ETFs. In a landscape where fewer than one quarter of the ETF products available in the U.S. provide fixed income exposure, the company aims to provide better tools for investors to manage their fixed income portfolios.
“There is a possibility the Fed does not raise rates at the upcoming meeting and pauses its rate hiking program,” said Todd Rosenbluth, head of research at VettaFi. “It is great investors have a wide range of products along the curve to choose from.”
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