ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Direct Indexing
    • Disruptive Technology
    • Energy Infrastructure
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Financial Literacy
    • Fixed Income
    • Gold/Silver/Critical Minerals
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Modern Alpha
    • Multifactor
    • Night Effect
    • Portfolio Strategies
    • Responsible Investing
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
  • 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. A 50-Year Treasury Bond May Be Soon On The Way
News
Share

A 50-Year Treasury Bond May Be Soon On The Way

Ben HernandezNov 07, 2019
2019-11-07

The Treasury Department has been contemplating the release of an ultra-long bond, but it appears debt issues with a 50-year maturity date may be coming sooner than we think. The news comes as yields have been at record lows and talks of zero to negative interest rates are creeping into bond market vernacular.

The news comes after the Federal Reserve lowered interest rates for a third time. The central bank doesn’t foresee any future hikes until economic data warrants the move.

Per a CNBC report, the Treasury “is ‘exploring’ potential additions to the current suite of Treasury securities, including a 20-year nominal coupon bond, a 50-year nominal coupon bond and a one-year floating-rate note linked to the Secured Overnight Financing Rate, according to the Treasury’s quarterly refunding statement released Wednesday.”

“Treasury is taking a proactive approach to prepare for prospective future financing needs,” said the statement on Wednesday.

The department was already contemplating the idea last month per a report in Barron’s, “U.S. officials have revived a conversation about issuing ultra-long Treasury bonds, which would mature in 50 to 100 years, now that long-term borrowing costs have fallen to record lows. Treasury Secretary Steven Mnuchin recently told Bloomberg News that his staff is ‘actively revisiting’ the idea of issuing an ultra-long bond, ‘and it is something that is under very serious consideration.’”

The department seems keen that in order to be competitive with yields, it will require investors to take on more duration risk. In times like now where yields are low, income can be hard to come by, but rather than looking for debt issues with the highest yield at the expense of longer duration, market experts are warning investors to keep their duration exposure short.

“If you’re going to buy bonds and you need income, I would keep your duration, [your]maturities, short or very medium short,” said Todd Morgan, chairman and CEO of Bel Air Investment Advisors. “I think it’s too dangerous because rising interest rates — which, they could happen in the next couple years — could do a lot of damage to your portfolio if you start buying long-term bonds.”


Content continues below advertisement

ETF Bond Exposure Options

Investors looking to gain broad-based exposure to bonds can look at funds like the ProShares S&P 500 Bond ETF (SPXB B). The fund seeks investment results that track the performance of the S&P 500®/MarketAxess Investment Grade Corporate Bond Index, which consists exclusively of investment-grade bonds issued by companies in the S&P 500.

Investment-grade corporate bond-focused fixed-income ETF options include the iShares Intermediate Credit Bond ETF (CIU A), iShares iBoxx $ Investment Grade Corp Bd ETF (LQD A) and Vanguard Interm-Term Corp Bd ETF (VCIT A). Investors looking for broad-based core bond exposure can look to a fund like the iShares Core US Aggregate Bond ETF (AGG A).

This article originally appeared on ETFTrends.com.

» Popular Pages

  • Tickers
  • Articles

Jun 02

A Cash Alternatives ETF With a Distribution Yield Over 6%

Jun 02

Treasury Yields Snapshot: June 2

Jun 02

Main Management Market Note: June 2, 2023

Jun 02

China’s EV Market Recovers, Keep an Eye on KARS

Jun 02

A Debt Limit Deal Is Made, Target Treasuries of Any Duration

Jun 02

This Week in ETFs: Only 2 Launches, Many Closures

Jun 02

As Summer Nears, Eye Travel Stocks in JRNY

Jun 02

NYSE’s ETF Leaders: Northern Trust’s Michael Natale

Jun 02

Seize Market Gains & Optimize Dividends With KVLE

Jun 02

VettaFi Voices: Active or Passive for ESG ETFs?

QQQ

Invesco QQQ Trust

SPY

SPDR S&P 500 ETF Trust

JEPI

JPMorgan Equity Premium...

VTI

Vanguard Total Stock Market...

VOO

Vanguard S&P 500 ETF

VGT

Vanguard Information...

TLT

iShares 20+ Year Treasury...

BND

Vanguard Total Bond Market...

XLP

Consumer Staples Select...

BOTZ

Global X Robotics &...


Content continues below advertisement

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