The post-Labor Day sell-off in technology saw a return to safe haven Treasury notes as investors were skeptical of another tech-like bubble similar to the Dotcom bust in the early 2000s. Technology rebounded during Wednesday’s trading session, but more uncertainty surrounding Covid-19 and an overheated tech market could keep fueling a return to government debt.

ETF investors looking to get exposure to fixed income funds like 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, which measures the performance of public obligations of the U.S. Treasury that have a remaining maturity greater than or equal to twenty years.

TLT Chart

TLT data by YCharts

Another market mover involves China. While Chinese equities are rebounding after Covid-19, certain shares could take a hit following U.S. government action.

“Investors also closely monitor U.S.-China tensions and looked to whether tech shares could recover from their recent downturn,” a CNBC article noted. “On Monday, President Donald Trump again raised the idea of separating the world’s two largest economies, claiming the U.S. would not lose out financially if the country stopped doing business with China.”

“His comments followed the possible U.S. blacklisting of China’s largest chipmaker, Semiconductor Manufacturing International Corp (SMIC). Shares of the company plunged over 23% on Monday in response to the news,” the article added.

In the meantime, here are some more bond-focused ETFs to consider include:

  1. Xtrackers Bloomberg Barclays US Investment Grade Corporate ESG ETF (ESCR): seeks investment results that correspond generally to the performance, before fees and expenses, of the Bloomberg Barclays MSCI US Corporate Sustainability SRI Sector/Credit/Maturity Neutral Index. The index generally aims to keep the broad characteristics of its parent index, the Bloomberg Barclays US Corporate Index (an investment grade corporate bond universe), resulting in a broad investment grade fixed income market exposure with ESG aspects.
  2. Xtrackers USD High Yield Corporate Bond ETF (HYLB): seeks investment results that correspond generally to the performance, before fees and expenses, of the Solactive USD High Yield Corporates Total Market Index. The index comprised of U.S. dollar-denominated high yield corporate bonds will concentrate its investments in a particular industry or group of industries to the extent that its underlying index is concentrated.
  3. Xtrackers Short Duration High Yield Bond ETF (SHYL): seeks investment results that correspond generally to the performance, before fees and expenses, of the Solactive USD High Yield Corporates Total Market 0-5 Year Index. The fund will invest at least 80% of its total assets (but typically far more) in component securities of the underlying index. The underlying index is designed to track the performance of short-term publicly issued U.S. dollar-denominated below investment grade corporate debt.

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