Seek Higher Yields With Shorter-Duration U.S. Treasuries | ETF Trends

While it’s been a bad time for stocks, it’s been even worse for bonds. This year has been the worst period for bonds since at least 1926, and it’s shaping up to be the worst year for bonds since the late 18th century.

But while it’s been a tumultuous time for fixed income, it’s also been an exciting one. Aggressive monetary tightening from central banks has helped push yields on some risk-free U.S. Treasuries to 15-year highs. Plus, institutional investors with long-term investment horizons understand that investing is a marathon, not a sprint, and that daily headlines, while they’re something to keep an eye on, shouldn’t dictate portfolio moves.

“Much as truly long-term investors are likely to be better off if they can ignore the turmoil in the stock market and just hang onto well-diversified holdings in low-cost index funds, most bond investors can expect to benefit if they can ride out this upheaval and hold onto their bonds, whether owned individually or in diversified funds,” wrote Jeff Sommer in the New York Times.

Amid ongoing extreme volatility across fixed income markets, one way that investors can ride out the market turmoil is to seek the higher yields available in shorter-duration U.S. Treasuries. So, BondBloxx Investment Management launched a suite of eight target duration U.S. Treasury ETFs to offer investors more precise duration management tools.

The BondBloxx Target Duration U.S. Treasury ETFs track indexes, developed by Bloomberg Index Services, are based on duration-constrained subsets of U.S. Treasury bonds with more than $300 million outstanding. In accordance with the index methodology, the BondBloxx Target Duration U.S. Treasury ETFs are rebalanced monthly by the BondBloxx portfolio management team to each target duration.

These ETFs can help investors quickly implement and maintain their preferred tactical duration exposure. They can also provide investors with a more precise way to manage portfolio duration with U.S. Treasuries without having to monitor for duration drift or executing rebalances.

The new ETFs add to the existing 11 BondBloxx products that have been launched since February 2022, including seven industry sector-specific high yield bond ETFsthree ratings-specific high yield bond ETFs, and one short-duration emerging market bond ETF.

BondBloxx was launched in October 2021 to develop precision fixed income ETFs. In a landscape where less 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.

“BondBloxx has continued to launch innovative products since its founding and has expanded the ETF universe with targeted products where there is white space,” said Todd Rosenbluth, head of research at VettaFi. “Their broad range of fixed income funds makes them a firm to watch as the asset category grows.”

For more news, information, and strategy, visit the Institutional Income Strategies Channel.