Yields for U.S. Treasuries are soaring as the Federal Reserve continues to raise interest rates and investors remain uncertain about how the U.S. central bank will proceed going forward. Per CNBC, on Wednesday, the yield on the 10-year Treasury was higher by around 16 basis points at 3.779%. Meanwhile, the 2-year Treasury climbed 7 basis points to 4.171%. The yield on the 30-year Treasury was up 8.9 basis points to 3.776%.
The Fed has been aggressively raising interest rates, with Chairman Jerome Powell suggesting it would continue to do so to curb record-high inflation. This hawkish path of quantitative tightening has triggered a recession among investors.
But on Tuesday, the Bureau of Labor Statistics reported over 1 million fewer job openings than markets anticipated for August, suggesting that the labor gap may be narrowing. This new labor data has led some analysts to believe that the Fed could pump the brakes a bit with its rate hikes going forward.
For investors who want to take advantage of these higher yields within U.S. Treasuries, BondBloxx Investment Management launched a suite of eight target duration U.S. Treasury ETFs offer investors more precise duration management tools. The BondBloxx Target Duration U.S. Treasury ETFs track indexes, developed by Bloomberg Index Services, are based on duration-constrained subsets of U.S. Treasury bonds with more than $300 million outstanding. In accordance with the index methodology, the BondBloxx Target Duration U.S. Treasury ETFs are rebalanced monthly by the BondBloxx portfolio management team to each target duration.
These ETFs can help investors quickly implement and maintain their preferred tactical duration exposure. They can also provide investors with a more precise way to manage portfolio duration with U.S. Treasuries without having to monitor for duration drift or executing rebalances.
The new ETFs add to the existing 11 BondBloxx products that have been launched since February 2022, including seven industry sector-specific high-yield bond ETFs, three ratings-specific high-yield bond ETFs, and one short-duration emerging market bond ETF.
BondBloxx was launched in October 2021 to develop precision fixed income ETFs. In a landscape where less than one-quarter of the ETF products available in the U.S. provide fixed income exposure, the company aims to provide better tools for investors to manage their fixed income portfolios.
“BondBloxx has continued to launch innovative products since its founding and has expanded the ETF universe with targeted products where there is white space,” said Todd Rosenbluth, head of research at VettaFi. “Their broad range of fixed income funds makes them a firm to watch as the asset category grows.”
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