U.S. Treasury yields rose on Monday in advance of the Federal Reserve preparing to meet this week. Per CNBC, as of midday Monday, the two-year Treasury yield was trading at 5.075%. Meanwhile, the 10-year Treasury note yielded 4.357%.
CME’s FedWatch tool gives 99% odds that the Fed will keep rates unchanged this week. But the agency could still raise rates later this year, as inflation isn’t yet at the central bank’s 2% target.
Duration-Specific Treasury ETFs
BondBloxx has a suite of eight duration-specific U.S. Treasury ETFs 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.
BondBloxx was launched in October 2021 to develop precision fixed income ETFs. Now, the issuer offers 19 funds that span U.S. Treasuries, industry- and credit-rating-specific high-yield bonds, and emerging markets bonds.
“BondBloxx is one of the more innovative providers of fixed income ETFs,” said VettaFi’s head of research Todd Rosenbluth. “They offer advisors and investors the opportunity to target duration with risk-off government bonds.”
The issuer recently crossed the $2 billion asset mark due to demand for its Treasury bond ETFs. At a panel on VettaFi’s Fixed Income Symposium, BondBloxx co-founder Joanna Gallegos said that U.S. Treasuries have been a great alternative to cash. They’re also a great way to capture as much yield as possible.
“It’s hard to walk away from a 5% risk-free yield,” she said.
For more news, information, and analysis, visit the US Treasuries & TIPS Fixed Income Channel.