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Best-Performing Treasury ETFs Amid Market Selloff

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Though bond ETFs has lagged the stock market this year, it started sizzling of late. A dovish Fed which issued downbeat outlook for the U.S. economy in their March meeting, disappointing manufacturing data from the Euro zone, Brexit debacle, no concrete resolution in the US-China trade deal and a slowing Chinese economy led to a severe stock market sell-off on Mar 22 and triggered a safe-haven rally.

The benchmark 10-year U.S. Treasury yield dropped to a 15-month low. The benchmark U.S. treasury yield was 2.44% on Mar 22, down 10 bps from the day before and down 32 bps from the start of the month. In the past week (as of Mar 22, 2019), the S&P 500 lost about 1.1% while most of the bond ETFs were in the green.

There are several bond ETFs that offered great returns on Mar 22. Among them, below we highlight a few top-performing bond ETFs.

PIMCO 25+ Year Zero Coupon US Treasury ETF (ZROZ - Free Report) – up 2.5% on Mar 22

The fund looks to capture the returns of The BofA Merrill Lynch Long US Treasury Principal STRIPS Index. This Index is unmanaged index comprised of long maturity Separate Trading of Registered Interest & Principal of Securities representing the final principal payment of U.S. Treasury bonds. The fund charges 15 bps in fees and added 4.3% past week.

Vanguard Extended Duration Treasury ETF (EDV - Free Report) – up 2.2% on Mar 22

The underlying Bloomberg Barclays US Treasury STRIPS 20-30 Year Equal Par Bond Index includes zero-coupon U.S. Treasury securities, which are backed by the full faith and credit of the U.S. government, with maturities ranging from 20 to 30 years. It charges 7 bps in fees and gained about 2.2% past week (read: Top ETF Trends for 2019).

Vanguard Long-Term Treasury ETF (VGLT - Free Report) – up 2.2% on Mar 22

The underlying Bloomberg Barclays US Long Treasury Bond Index includes fixed income securities issued by the U.S. Treasury with maturities greater than 10 years. It charges 7 bps in fees and added 2.6% in the past week (read: Treasury ETFs Surging: 5 Best Performers).  

iShares 20+ Year Treasury Bond ETF (TLT - Free Report) – up 1.6% on Mar 22

The underlying ICE U.S. Treasury 20+ Year Bond Index assesses U.S. Treasury issued debt. Only U.S. dollar denominated, fixed rate securities with minimum term to maturity greater than twenty years are included. It charges 15 bps in fees and added 2.6% in the past week.

SPDR Portfolio Long Term Treasury ETF (SPTL - Free Report) – up 1.5% on Mar 22

The underlying Bloomberg Barclays Long U.S. Treasury Index includes all publicly issued, U.S. Treasury securities that have a remaining maturity of 10 or more years, are rated investment grade, and have $250 million or more of outstanding face value. It charges 6 bps in fees and advanced 2.6% past week (as of Mar 22, 2019) (see all Government Bond ETFs here).

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