The best treasury bond to buy right now depends significantly on individual investment goals, risk tolerance, and time horizon. While direct treasury bond purchases are an option, many investors choose to gain exposure to U.S. Treasuries through Exchange Traded Funds (ETFs) due to their diversification, liquidity, and ease of trading. These funds bundle various Treasury securities, offering a convenient way to invest across different maturity ranges.
Considering current market offerings and common investor objectives, here are some top Treasury ETFs to evaluate:
Top Treasury ETFs to Consider
| ETF Name | Expense Ratio | Yield to Maturity |
|---|---|---|
| iShares U.S. Treasury Bond ETF (GOVT) | 0.05% | 4.2% |
| Invesco Equal Weight 0-30 Year Treasury ETF (GOVI) | 0.15% | 4.3% |
| Xtrackers US 0-1 Year Treasury ETF (TRSY) | 0.06% | 4.4%* |
| Direxion Daily 20+ Year Treasury Bear 3X Shares (TMV) | 1.01% | 4.4%** |
*Note: Yields are subject to market fluctuations.
**Note: TMV is a leveraged inverse ETF and generally not suitable for typical long-term treasury investment; it is designed for short-term bearish plays on long-term Treasuries.
Key Considerations for Choosing Your Treasury Investment
To determine the "best" fit for your portfolio, consider the following aspects:
- Yield to Maturity vs. Risk Tolerance: If maximizing current income is a priority, and you are comfortable with very short-term exposure, an ETF like the Xtrackers US 0-1 Year Treasury ETF (TRSY) stands out with its 4.4% yield. Short-term Treasury ETFs generally carry less interest rate risk compared to long-term options.
- Expense Ratio: For cost-conscious investors seeking broad exposure to U.S. Treasuries, the iShares U.S. Treasury Bond ETF (GOVT) offers a highly competitive expense ratio of just 0.05%. A lower expense ratio means more of your returns stay in your pocket over time.
- Maturity Range:
- Short-Term (e.g., TRSY): Ideal for investors seeking liquidity and lower interest rate sensitivity. These tend to perform better when interest rates are expected to rise or remain stable, offering competitive yields on shorter durations.
- Broad/Intermediate Term (e.g., GOVT): Provides exposure across various Treasury maturities, offering a balance of yield and interest rate sensitivity.
- Equal Weight Long-Term (e.g., GOVI): The Invesco Equal Weight 0-30 Year Treasury ETF (GOVI) diversifies across the entire maturity spectrum with an equal-weighting approach, potentially offering a different risk/return profile than market-cap weighted funds.
- Investment Strategy: Be mindful of specialized ETFs like the Direxion Daily 20+ Year Treasury Bear 3X Shares (TMV). Such funds are designed for highly specific, often short-term, speculative strategies (in TMV's case, betting against long-term Treasuries with leverage) and are typically not suitable for general bond investment portfolios.
Ultimately, the best treasury investment aligns with your individual financial objectives, whether that's capital preservation, income generation, or diversification against other assets.
