Bond ETFs Look Attractive at 5.2% as 30-Year Treasury Yield Tops 5.3%
Updated
Updated · Yahoo Finance · Aug 22
Bond ETFs Look Attractive at 5.2% as 30-Year Treasury Yield Tops 5.3%
3 articles · Updated · Yahoo Finance · Aug 22
Summary
Treasury yields near multi-year highs are reviving the case for bond ETFs, with the 10-year around 4.65% and the 30-year briefly above 5.3%—its highest since 2007.
Higher starting yields have changed the risk-reward math after the Fed-driven bond bear market, making income prospects stronger even if rates rise modestly again later this year.
Vanguard Long-Term Treasury ETF offers about a 5.2% yield, but its nearly 14-year duration means roughly a 14% price move for every 1-point shift in rates.
Vanguard Total Bond Market ETF yields about 4.6% with less than half that rate sensitivity, trading some interest-rate risk for added corporate credit exposure.
The choice now hinges on whether investors want a pure Treasury bet with higher volatility or a broader bond mix with more moderate risk.