ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Themes
      • Active ETF
      • Artificial Intelligence
      • Beyond Basic Beta
      • China Insights
      • Climate Insights
      • Core Strategies
      • Crypto
      • Disruptive Technology
      • Energy Infrastructure
      • ETF Building Blocks
      • ETF Investing
      • ETF Education
      • ETF Strategist
      • Financial Literacy
      • Fixed Income
      • Free Cash Flow
      • Innovative ETFs
      • Institutional Income Strategies
      • Leveraged & Inverse
      • Managed Futures
      • Market Insights
      • Modern Alpha
      • Multifactor
      • Responsible Investing
      • Retirement Income
      • Tax Efficient Income
    • Asset Class
      • Equity
        • U.S. Equity
        • Int'l Developed
        • Emerging Market Equities
      • Alternatives
        • Commodities
        • Gold/Silver/Critical Minerals
        • Currency
        • Volatility
      • Fixed Income
        • Investment Grade Corporates
        • US Treasuries & TIPS
        • High Yield Corporates
        • Int'l Fixed Income
    • ETF Ecosystem
    • ETFs in Canada
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF of the Week Podcast
    • ETF Prime Podcast
    • Video
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Institutional Income Strategies Channel
  2. Use Target Duration Treasuries to Capture Outperformance
Institutional Income Strategies Channel
Share

Use Target Duration Treasuries to Capture Outperformance

James Comtois
2023-01-18

U.S. Treasuries saw their yields rise sharply throughout 2022 as the Federal Reserve aggressively raised interest rates. But with the threat of a recession looming over the economy and inflation appearing to have peaked, investors are betting on the Fed pulling back on its hawkish stance on fighting inflation through quantitative tightening.

More people expect a recession in 2023 than at any time in the last 50 years, according to a survey conducted by the Philadelphia Federal Reserve. Should a recession occur, the Fed could reduce interest rates in the second half of 2023. This could provide investors with potential capital gains on their U.S. Treasury positions as rates fall.

“Longer duration U.S. Treasuries could provide outperformance potential in anticipation of the downward policy pivot by the Fed,” according to the BondBloxx 2023 Fixed Income Market Outlook.

In September, BondBloxx Investment Management announced the launch of a suite of eight target-duration U.S. Treasury ETFs, which seek to offer investors a more precise, lower-cost way to get exposure to U.S. Treasury securities. The funds track a series of indexes developed by Bloomberg Index Services that include duration-constrained subsets of U.S. Treasury bonds with more than $300 billion outstanding.

The target durations range from six months to 20 years. They’re the first ETFs designed to track indexes that achieve target durations using U.S. Treasury securities, instead of specific maturities or maturity ranges.

“In today’s rapidly changing interest rate environment, key priorities for portfolio managers and investors are earning higher yields on strategic cash positions, precisely managing duration risk, and having effective collateral tools,” said BondBloxx client portfolio manager JoAnne Bianco in a news release. “BondBloxx Target Duration U.S. Treasury ETFs may help investors in all these areas, with the potential benefits of being lower cost, transparent, liquid and tax efficient.”

Launched in October of 2021 to provide precision ETF exposure for fixed income investors, BondBloxx was founded by ETF industry leaders Leland Clemons, Joanna Gallegos, Tony Kelly, Mark Miller, Brian O’Donnell, and Elya Schwartzman. The team has collectively built and launched over 350 ETFs at firms including BlackRock, JPMorgan, State Street, Northern Trust, and HSBC.

Since February, BondBloxx has launched 19 fixed income ETFs, including seven industry sector-specific high yield bond ETFs, three ratings-specific high yield bond ETFs, eight duration-specific U.S. Treasury ETFs, and one short-duration emerging market bond ETF.

For more news, information, and analysis, visit the Institutional Income Strategies Channel.

Loading Articles...
Our Sites
  • VettaFi
  • Advisor Perspectives
  • ETF Trends
Tools
  • ETF Screener
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Database Pro
More Tools
  • Financial Advisor & RIA Center
Explore ETFs
  • ETF News
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Information
  • Contact Us
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X