Investors looking to take advantage of high yields have been going on a buying spree with U.S. Treasuries. American households bought nearly $700 billion in Treasuries in the first half of the year. And according to the Financial Times, they’re on pace to buy $1.3 trillion in Treasuries for the year.
Citing data from Goldman Sachs, the FT reported that U.S. households own 9% of the Treasuries market. (This includes hedge funds.) That’s up from 2% at the start of 2022.
The 10-year Treasury yield rose more than 9 basis points on Tuesday to 4.805%. Meanwhile, the yield for two-year Treasuries went up nearly 6 bps, to 5.152%. CNBC reported that Treasury yields rose “as investors mulled over the outlook for interest rates.” Stronger-than-expected economic data also pushed up yields.
See more: “Capture High Yields From Long-Term Treasuries With XTEN”
Target Duration With BondBloxx
BondBloxx offers a suite of eight duration-specific U.S. Treasury ETFs. They track a series of indexes that include duration-constrained subsets of U.S. Treasuries with more than $300 billion outstanding. They’re designed to track indexes that achieve target durations using U.S. Treasury securities instead of specific maturities or maturity ranges.
The ETFs range in duration from six months to 20 years.
BondBloxx was launched in October 2021 to develop precision fixed income ETFs. Now, the issuer offers 20 funds that span U.S. Treasuries, industry- and credit-rating-specific high yield bonds, and emerging markets bonds.
“BondBloxx is one of the more innovative providers of fixed income ETFs,” said VettaFi’s Head of Research Todd Rosenbluth. “They offer advisors and investors the opportunity to target duration with risk-off government bonds.”
The issuer recently crossed the $2 billion asset mark, largely due to demand for its Treasury bond ETFs. At a panel on VettaFi’s Fixed Income Symposium, BondBloxx Co-Founder Joanna Gallegos said that U.S. Treasuries have been a great alternative to cash. They’re also a great way to capture as much yield as possible.
“It’s hard to walk away from a 5% risk-free yield,” she said.
For more news, information, and analysis, visit the US Treasuries & TIPS Fixed Income Channel.