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Treasury Bond ETFs provide investors with a convenient and easy way to invest in Treasury bonds and generate fixed income. Investing in a diversified portfolio of Treasury bonds can minimize risk while still earning a predictable income stream.
US Treasury bonds are debt securities issued by the US government that pay a fixed interest rate over a specific period of time. These bonds are one of the safest investment options available, as the full faith and credit of the US government back them.
Vested offers various ETFs that allow you to gain passive exposure to US Treasury bonds across various maturities and interest rates. These ETFs distribute interest payments from the underlying bonds in the form of dividends regularly, which provide investors with a predictable stream of income over the life of the ETF.
Vested offers different types of Treasury Bond ETFs to suit the various requirements of investors:
Short-Term Treasury Bond ETFs invest in Treasury bonds with short-term maturities, typically ranging from one to three years. Short-term Treasury bonds are generally less sensitive to interest rate changes than longer-term bonds, making them a good option for investors concerned about interest rate risk.
Long-Term Treasury Bond ETFs invest in Treasury bonds with longer maturities, typically ranging from 10 to 30 years. Long-term Treasury bonds are more sensitive to interest rate changes than shorter-term bonds, which can provide higher returns but carry more risk. To learn more about such risks, you can read about inverted yield curves here.
Inflation-Protected Treasury Bond ETFs invest in Treasury bonds that are indexed to inflation. The principal value of the underlying bond adjusts to keep pace with inflation over time. Inflation-protected Treasury bonds can be a good option for investors who are concerned about inflation risk.
Floating-Rate Treasury Bond ETFs invest in Treasury bonds with variable interest rates. The interest rate on these bonds adjusts periodically based on changes in a benchmark interest rate, such as the Federal Reserve’s target rate. Floating-rate Treasury bonds can be a good option for investors who are concerned about interest rate risk.
Examples of Treasury Bond ETFs available on Vested
| Name | Symbol | Type | Yield* | Prospectus |
|---|---|---|---|---|
| iShares 0-3 Month Treasury Bond ETF | SGOV | Short-Term | 4.58% | Link |
| iShares 20+ Year Treasury Bond ETF | TLT | Long-Term | 3.69% | Link |
| iShares TIPS Bond ETF | TIP | Inflation-Protected | 7.50% | Link |
| iShares Treasury Floating Rate Bond ETF | TFLO | Floating-Rate | 4.78% | Link |
*The ETF yield quoted above is the 30-day SEC yield as of 23rd March 2023. This yield reflects the interest earned by the average investor in the fund after deducting the fund’s expenses during the most recent 30-day period.
