Investors are pumping cash into fixed income exchange traded funds, particularly into Treasury ETFs. In fact, they’ve put more than twice the amount of money into Treasury ETFs than the second-most popular bond ETFs.
Per Strategas ETF Research, as of October 6, flows into Treasury ETFs reached $109 million since Oct. 12, 2022. By comparison, $49 million went into long-duration bond funds during the same period.
On October 6, the yield for the two-year Treasury note reached 5.08%, while the 10-year Treasury note yielded 4.78%.
Low Risk, High Yield
For investors seeking the low risks and high yields of Treasuries, Vanguard offers a suite of U.S. Treasury ETFs. Those looking to stay on the short end of the curve may want to check out the Vanguard Short-Term Treasury ETF (VGSH ). VGSH invests primarily in investment-grade (IG) U.S. Treasury bonds with a dollar-weighted average maturity of one to three years.
For investors wanting a little more duration, the Vanguard Intermediate-Term Treasury ETF (VGIT ) may be more their speed. VGIT targets IG Treasuries with an average maturity of five to 10 years.
And for investors wanting to lock in some higher yields for longer, the Vanguard Long-Term Treasury ETF (VGLT ) could be what they’re looking for. VGLT targets Treasuries with an average maturity of 10 to 25 years.
All three funds have an expense ratio of 4 basis points.
VettaFi’s vice chairman Tom Lydon called Vanguard “the Hoover of the ETF industry” for how it’s vacuumed up investor dollars.
“They are just rock solid,” Lydon said. “They have so many choices. They’re low-cost and always very, very dependable.”
For more news, information, and analysis, visit the Fixed Income Channel.
