1 week Ago By Chandrima Sanyal
When stock market volatility erupts — as it has during global trade tensions, changing Fed policy, and fresh inflationary pressures — the bond market is meant to act as a financial lifeboat. And recently, it ha s. The biggest Treasury bond ETFs , such as the iShares 20+ Year Treasury Bond ETF TLT , retained their footing and moved higher, reminding investors why bonds remain a cornerstone of portfolio stability.
Also Read: Gold Miners Go Parabolic: GDX Hits 2012 Highs, Newmont Soars 9% But it’s not only old-school buy-and-hold passive strategies that are in favor. Investors increasingly gravitate toward actively managed bond ETFs, wagering that clever managers can ride the rate rollercoaster more effectively than a fixed index. While active stock pickers again struggled, active bond managers quietly won, writes a report by S&P Global’s SPIVA Scorecard.
It discovered that most active bond funds beat their indexed counterparts in 11 of 16 fixed-income categories last year — a striking reversal of the long-standing narrative that active management doesn’t pay. Treasury ETFs Take Center Stage During the latest round of market upheaval, Treasury bond ETFs attracted billions of dollars in flows as investors flocked to find shelter from the tempest. According to Morningstar: The Bronze-rated iShares 7-10 Year Treasury Bond ETF IEF attracted $2.
6 billion between April 3 and April 7 The shorter-duration SPDR Portfolio Intermediate Term Treasury ETF SPTI attracted $1.6 billion. Investors preferred low credit-risk vehicles but were still on the fence about the amount of interest rate risk they were willing to endure.
The Vanguard Total Bond Market ETF BND and the iShares Core US Aggregate Bond ETF AGG were also in hot demand. Unlike past bear markets, however, these passive giants were matched by flows into actively managed “enhanced core” bond funds — strategies that try to beat the likes of AGG, according to CNBC. Active enhanced core funds attracted five times more money than their passive counterparts in the core bond space this year, ETFaction says.
Also Read: How Intel’s CEO Pick Could Jolt Chip Stocks And ETFs The Emergence Of Ultrashort ETFs Ultrashort bond ETFs were also front and center, serving as cash substitutes during the mayhem. According to Morningstar, the SPDR Bloomberg 1-3 Month T-Bill ETF BIL received $3.5 billion in inflows from April 3 to 7.
The iShares 0-3 Month Treasury Bond ETF SGOV took in another $1.1 billion. With modest yields and little risk, these funds are now the parking lots of choice for investors who want to hold capital without locking it up for a longer duration.
Still, not all parts of the ultrashort segment thrived. Riskier plays like the Janus Henderson AAA CLO ETF JAAA — which had tripled in size in just 12 months — saw a reversal of fortune, bleeding over $1 billion recently as investors moved away from higher credit risk, per Morningstar report. What’s Next? The Federal Reserve continues to fight inflation, while policy confusion hurts the economic outlook.
Yet, bond market forces are in transition. Rather than simply going into hiding — they’re getting more subtle in their approach. Passive ETFs remain in the picture, but the increasing demand for actively managed Treasury and core bond funds represents a new fixed-income era.
As Treasury ETFs provide a sound hedge and active bond managers are justifying their role, the new bond market playbook may not be so passive after all. Read Next: Smart Investors Are Watching These 3 ETFs After Surprise Jobs Data Beat Image: Shutterstock Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock – anytime. © 2025 Benzinga.
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