Renewed coronavirus fears are keeping the funds flowing into the safe haven bond market, which drove yields lower as the 30-year Treasury note fell below 2% to hit a new low. Per a MarketWatch report, the 30-year note hit a bottom of 1.89% based on Tradeweb data.

“Fitful spurts of Corona virus anxieties made for erratic trading in risk markets, but the bid for treasuries remained firm, especially out the curve where the long bond set a record low yield,” said Ward McCarthy, chief financial economist for Jefferies, in a note.

Heading into the shorter end of the yield curve, the 10-year note had a weekly decline of 12 basis points, while the 2-year note touched down to a three-week low. Based on a MarketWatch report by Sunny Oh, market analysts “say the slump in the long bond’s yield this week reflects a confluence of factors including easy Federal Reserve monetary policy, concerns about the COVID-19 epidemic’s impact on economic growth, and an absence of inflationary pressures.”

30-year yield

ETF Opportunities in Treasurys

ETF Investors who want to take advantage of rising government debt prices, especially in the short end of the yield curve amid coronavirus fears, they can look at the iShares Short Treasury Bond ETF (NasdaqGM: SHV). SHV seeks to track the investment results of the ICE U.S. Treasury Short Bond Index, which measures the performance of public obligations of the U.S. Treasury that have a remaining maturity of equal to or greater than one month and less than one year. Additionally, the fund may invest up to 10% of its assets in U.S. government bonds not included in the underlying index, but which BFA believes will help the fund track the underlying index.

SHV provides:

  • Exposure to U.S. Treasury bonds that mature in less than 1 year
  • Targeted access to a specific segment of the U.S. Treasury market
  • Use to customize your exposure to Treasuries

Investors can also take a look at the iShares 20+ Year Treasury Bond ETF (NasdaqGS: TLT). TLT seeks to track the investment results of the ICE U.S. Treasury 20+ Year Bond Index (the “underlying index”). The underlying index measures the performance of public obligations of the U.S. Treasury that have a remaining maturity greater than or equal to twenty years.

Advantages of adding TLT to your portfolio:

  • Exposure to long-term U.S. Treasury bonds
  • Targeted access to a specific segment of the U.S. Treasury market
  • Use to customize your exposure to Treasuries

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