There’s more than enough market influences to induce volatility right now. That’s indicative in the CBOE Volatility Index (VIX), which is up almost 80% in 2022.
Of course, the latest market movements aren’t primarily the byproduct of inflationary pressures. The world is keeping an eye on the crisis in Ukraine, which only turbocharged volatility in the capital markets.
“It’s about managing risk into the weekend. With the Ukraine-Russia situation, headlines can appear and shift the picture. While this is a live issue, we’ll see a lot of this especially on Fridays,” said James Athey, an investment manager at abrdn.
One of the ways to manage risk is to head into safe haven assets like Treasury notes. However, for investors who also want an element of yield while they park their cash in government debt, they can look to longer duration options.
Get Yield and Safety
Investors looking for the safe confines of U.S. Treasury notes but who want more yield can step further out onto the yield curve and get longer duration exposure. One option from Vanguard to consider is the Vanguard Long-Term Treasury Index Fund ETF Shares (VGLT ).
The fund seeks to track the performance of a market-weighted Treasury index with a long-term dollar-weighted average maturity. The fund employs an indexing investment approach designed to track the performance of the Bloomberg U.S. Long Treasury Bond Index, which includes fixed income securities issued by the U.S. Treasury (not including inflation-protected bonds) with maturities greater than 10 years.
The fund comes with a 30-day SEC yield of 2.29% as of March 3. Additionally, VGLT features a low expense ratio of just 4 basis points.
For more news, information, and strategy, visit the Fixed Income Channel.