Short-Term Treasury ETFs Seeing Major Inflows

Two of BondBloxx Investment Management’s eight duration-specific U.S. Treasury ETFs have brought in nearly $1.31 billion in inflows year-to-date. The BondBloxx Bloomberg Six Month Target Duration US Treasury ETF (XHLF) and the BondBloxx Bloomberg One Year Target Duration US Treasury ETF (XONE) brought in $822.6 million and $483.4 million, respectively.

XHLF seeks to track an index containing U.S. Treasuries with an average duration of approximately 6 months. XONE, meanwhile, targets Treasuries with an average duration of about 1 year. Both funds have an expense ratio of 0.03%.

BondBloxx’s Treasury ETFs track a series of indexes that include duration-constrained subsets of Treasuries with more than $300 billion outstanding. The funds track indexes that achieve target durations using U.S. Treasuries instead of specific maturities or maturity ranges.

See more: “Enter the Treasury Yield Curve Based on Your Risk Tolerance

A Great Way to Capture as Much Yield as Possible

BondBloxx recently crossed $2 billion asset mark, largely due to demand for its Treasury bond ETFs. BondBloxx co-founder Joanna Gallegos said at a panel on VettaFi’s Fixed Income Symposium that U.S. Treasuries have been a great alternative to cash. Plus, they’re a great way to capture as much yield as possible.

“It’s hard to walk away from a 5% risk-free yield,” Gallegos said.

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. Now, BondBloxx offers 19 ETFs 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.”

For more news, information, and analysis, visit the US Treasuries & TIPS Fixed Income Channel.