With the end of the year approaching, it could be a good time to consider tax-loss harvesting to capture potential tax benefits. And given the performance in long-dated Treasuries over the last two years, U.S. Treasury ETFs are an easy, low-cost way of maintaining Treasury exposure while realizing losses for tax purposes.
When considering using U.S. Treasury ETFs for tax-loss harvesting purposes, investors should consider those that offer stable duration exposure. That way, they can target any spot on the yield curve with greater precision. That’s where BondBloxx comes into play.
The fixed income manager has a suite of eight duration-specific U.S. Treasury ETFs that range in duration from six months to 20 years. The funds track a series of indexes that include duration-constrained subsets of U.S. Treasuries with more than $300 billion outstanding. They’re designed to track indexes that achieve target durations using U.S. Treasury securities instead of specific maturities or maturity ranges.
Looking for Ideas? BondBloxx Has a Few
BondBloxx has recently suggested which of its eight funds could be used to harvest tax losses. For example, for investors with exposure to intermediate Treasuries, the ICE US Treasury 7-10 Year Index is down 2% year to date as of November 24 and down 15% over the last two years. So, they may want to sell their existing positions and reinvest that capital to either the BondBloxx Bloomberg Seven Year Target Duration US Treasury ETF (XSVN ) or the BondBloxx Bloomberg Ten Year Target Duration US Treasury ETF (XTEN ).
Meanwhile, the ICE US Treasury 10-20 Year Bond Index is down 5% YTD and down 27% over the last two years. Plus, the ICE US Treasury 20+ Year Index is down 8% YTD and down 35% over the last two years.
So, investors who are further out along the curve could sell their losing positions and reinvest in XTEN or the BondBloxx Bloomberg Twenty Year Target Duration US Treasury ETF (XTWY ).
BondBloxx was launched in October 2021 to provide precision ETF exposure for fixed income investors. It launched its first ETFs In February 2022. Now, BondBloxx manages more than $2 billion assets across 20 U.S.-listed ETFs.
For more news, information, and analysis, visit the US Treasuries & TIPS Fixed Income Channel.