When you want the safety and stability of a bond, but want to experience the higher yields than stocks offer, an ETF may be right for you. ETFs are more flexible than their mutual fund counterparts because they can be traded on exchanges during market hours. They also provide excellent diversification since they represent many types of securities rather than just one or two.
In this post, we take a look at some of the best treasury ETFs for Q2 2022, as well as what kind of strategy they are best suited for when it comes to retirement investing.
Let's start with a quick look at the best treasury ETFs for Q2 2022:
iShares High Yield Corporate Bond
The iShares High Yield Corporate Bond is the No. 1 ranked bond fund in the category and only trades once per day so it doesn't have any near-term volatility. However, a measured approach to its investments should put you in a good position to hold onto your gains if they happen. The fund invests in U.S. high-yield debt securities, which tend to be more volatile than low-yield debt instruments. This is why the fund has seen an average annual return of 11.71% since the fund was launched in January 2002.
This is a solid choice for those who are looking to take a long-term approach to invest and are planning on holding for long periods of time. The fund has shown that it can deliver year after year with a moderate return, as shown by its average annual return of 2.34%. The average yield on your investment will be around 8.21%, but you may get some significant income from this investment if you are willing to invest for the next few decades.
Unconstrained Bond ETF
The Unconstrained Bond ETF tracks an index consisting of U.S. Treasury securities with a maturity date one year out or longer. The fund provides you with the added benefit of being able to invest it in other credit instruments, such as high-yield bonds and junk bonds. This makes it a nice choice for investors who are considering getting into high-risk investments but don't want to limit their options in the process.
The average yield on this fund is 9.67%, and over the last four years alone this investment has returned 11.75%. This investment is going to provide you with an average annual return of 2.35% over the next 29 years. The fund is highly liquid, meaning you will be able to easily turn a profit or lose money with this investment. However, it is best to use this in combination with low-risk investments in order to achieve your retirement goals.
We always recommend you do an analysis of the performance history of any mutual fund to determine how it has performed over the last few years and in the previous decade as well. This will give you a better idea of how your money can perform overtime on average.
Vanguard Short-Term Inflation-Protected Securities Fund
The Vanguard Short-Term Inflation-Protected Securities Fund ranks No. 3 on our list of the best treasury ETFs for Q2 2022. The fund invests in short-term debt securities that are deemed "qualified" by the U.S. Treasury and that have a maturity date less than one year out or less than two years out when they are issued with zero principal payments due within one year.
The average yield on this investment is 0.44%, and over the last four years, it has returned 2.66%. This is an excellent investment in your portfolio, as it will provide you with a moderate return each year over the next seven fiscal years, as shown by its average annual return of 0.97%. However, we should warn you that this is a very high-risk investment. As such, you will want to invest only your most conservative funds with this one.
PowerShares Emerging Markets High Yield Fund
The PowerShares Emerging Markets High Yield Fund is ranked No. 4 on our list of the best treasury ETFs for Q2 2022. This fund invests in U.S. dollar debt securities issued by companies located in emerging markets around the world, as well as debt securities issued by U.S.-based government entities that are denominated in foreign currencies and bear interest rates in excess of 20%. The average yield on this investment is 1.83%, and over the last four years, it has returned 4.09%.
This investment is going to provide you with an average annual return of 3.85% over the next 20 years. The fund has a high level of volatility, which is something you should keep in mind when investing with this one. This means that while it can give you a very high return if the market moves in your favor, there's also the chance that you could lose money fast if things go the wrong way. Be sure to diversify your portfolio when investing with this fund to avoid losing all of your money overnight.
iShares 1-3 Year Treasury Bond Fund
The iShares 1-3 Year Treasury Bond Fund falls near the bottom of our list at No. 5. This fund invests in U.S. Treasuries that have maturities of one to three years. The average yield on this investment is 0.33%, and over the last four years has returned 2.37%. The reason we include it in our list of the best treasury ETFs for Q2 2022 is that it's a highly diversified investment that will provide you with a good return on your money each year, as shown by its average annual return of 1.80% over the last four years alone.
FTSE Developed Markets Treasury Index Fund
The FTSE Developed Markets Treasury Index Fund ranks No. 6 on our list of the best treasury ETFs for Q2 2022, and at just 0.98% the average yield on this investment is low enough to provide you with a great return on investment. This is one of the best choices if you're looking for a good investment for your portfolio.
