The information provided discusses the challenging state of the bond market in 2023, particularly for long-term government-issued Treasurys

1. Yield on 30-Year U.S. Treasurys: The yield on 30-year U.S. Treasurys reached a 16-year high in early October, briefly exceeding 5%. This surge in yields is indicative of an expectation for a "higher for longer" interest rate environment.

2. Market Outlook: While some experts anticipate that a recession could eventually lead to a slowdown in inflation and signal monetary easing by the Federal Reserve, there is currently a strong economy, which suggests that significant rate decreases in the coming months are unlikely.

3. Shorter-Duration Bonds: Shorter-duration Treasury bonds have shown more resilience in the challenging bond market conditions. Intermediate Treasury notes and short-term Treasury bills have fared better due to their lower sensitivity to interest rate fluctuations.

4. Creditworthiness of U.S. Treasurys: U.S. Treasurys are considered exceptionally safe securities with an extremely low probability of default, backed by the full faith and credit of the U.S. Treasury Department. Even after a rating downgrade by Fitch Ratings in August, their creditworthiness remains unmatched.

5. Treasury Exchange-Traded Funds (ETFs): Treasury ETFs offer an alternative for investors looking to navigate the complexities of individual Treasury purchases. They provide transparency, professional portfolio management, liquidity, diversification, and lower transaction costs compared to individual bonds.

Here are seven Treasury bond ETFs to consider in 2023, along with their expense ratios and yield to maturity:

• iShares U.S. Treasury Bond ETF (GOVT):

  • Expense Ratio: 0.05%

  • Yield to Maturity: 5%

• SPDR Bloomberg 1-3 Month T-Bill ETF (BIL):

  • Expense Ratio: 0.1354%

  • Yield to Maturity: 5.4%

• iShares 3-7 Year Treasury Bond ETF (IEI):

  • Expense Ratio: 0.15%

  • Yield to Maturity: 4.8%

• iShares 10-20 Year Treasury Bond ETF (TLH):

  • Expense Ratio: 0.15%

  • Yield to Maturity: 5.2%

• Vanguard Long-Term Treasury ETF (VGLT):

  • Expense Ratio: 0.04%

  • Yield to Maturity: 4.3%

• Global X 1-3 Month T-Bill ETF (CLIP):

  • Expense Ratio: 0.07%

  • Yield to Maturity: 5.6%

• Invesco Short Term Treasury ETF (TBLL):

  • Expense Ratio: 0.08%

  • Yield to Worst (Yield to Maturity if worst bond repayments are made): 5.4%

These ETFs offer different durations and yield profiles, allowing investors to choose the one that best aligns with their investment objectives and risk tolerance.

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