Vanguard Long-Term Treasury ETF (NASDAQ: VGLT)

에 대한 최신 뉴스 Vanguard Long-Term Treasury ETF (NASDAQ:VGLT)

Vanguard Long-Term Treasury ETF

Vanguard Long-Treasury ETF

The fund employs an indexing investment approach designed to track the performance of the Bloomberg Barclays U.S. Long Treasury Bond Index. This index includes fixed income securities issued by the U.S. Treasury (not including inflation-protected bonds), with maturities greater than 10 years. Under normal circumstances, at least 80% of the funds assets will be invested in bonds included in the index.

Vanguard Long Term Treasury ETF

Bonds

Technicals

Treasuries

Markets

Trading Ideas

iShares Trust Barclays 20+ Year Treasury Bond Fund

UTHY

VGLT

최근 장기 국채 상장지수펀드(ETF) 시장은 큰 변동성을 겪고 있으며, 현재로서는 어려운 시기를 맞이한 것으로 보인다. 몇 달 간 금리가 하락세를 보인 후, 10월에는 미국 국채 수익률이 반등하기 시작했고, 차트는 이제 경고 신호를 보내고 있다: 약세 신호인 데스 크로스(Death Cross)가 다가오고 있다.

수익률이 오르고 채권이 추락하면서 주요 장기 국채 ETF가 데스 크로스를 형성

It&#8217;s been a wild ride for long-term Treasury ETFs lately, and it's looking like they might have hit a rough patch. Following months of declining interest rates, yields on U.S. Treasurys reversed course in October, and the charts are now flashing a warning: the <a href="https://www.benzinga.com/topic/death-cross">dreaded Death Cross</a> is looming.
For those who aren&#8217;t familiar, the Death Cross occurs when the short-term moving average (such as the 50-day) crosses below the long-term moving average (like the 200-day). 
And that's exactly what's been happening for a trio of heavy hitters in the bond market: iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>), Vanguard Long-Term Treasury ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/VGLT#NASDAQ">VGLT</a>), and US Treasury 30 Year Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/UTHY#NASDAQ">UTHY</a>).
The recent surge in long-end yields, after months of decline, has turned this segment of the market into a hotbed of concern. The 10-year U.S. Treasury note yield, which fell to a low of 3.63% in September, jumped more than 0.80% as the Federal Reserve cut the federal funds target rate in September and November.
Read Also: <a href="https://www.benzinga.com/general/biotech/24/11/42243781/viking-therapeutics-stock-on-brink-of-death-cross-as-weight-loss-hype-loses-momentum">Viking Therapeutics Stock On Brink Of Death Cross As Weight Loss Hype Loses Momentum</a>
The result? A sharp inverse reaction in Treasury bond prices, and unfortunately, for these ETFs, that's a price decline.
Let's break it down:
<ul>
<li>iShares 20+ Year Treasury Bond ETF: Once a star of the bond world, this ETF now has its 50-day simple moving average below its 200-day. And while it&#8217;s seeing a bit of buying pressure, the bearish signals on the chart indicate a downward trend that could be setting up. With a stock price at $93.06 and RSI at 54.23, things aren&#8217;t looking rosy for this long-duration bond fund.</li>
</ul>
<figure class="wp-block-image size-full"><a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent120424&amp;t=be2bearmibe3na1"><img loading="lazy" decoding="async" width="628" height="490" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/12/04114152/Screenshot-2024-12-04-at-5.47.31-PM.png" alt="" class="wp-image-676881" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/12/04114152/Screenshot-2024-12-04-at-5.47.31-PM.png 628w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/12/04114152/Screenshot-2024-12-04-at-5.47.31-PM-300x234.png 300w" sizes="(max-width: 628px) 100vw, 628px" /></a></figure>
<a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent120424&amp;t=be2bearmibe3na1" target="_blank" rel="noreferrer noopener">Chart created using Benzinga Pro</a>
<ul>
<li>Vanguard Long-Term Treasury ETF: This ETF is in the same boat, with its 50-day moving average below the 200-day. It has a similar chart pattern to iShares 20+ Year Treasury Bond ETF and shows potential for future bearish movement as the market contemplates further interest rate hikes. At $58.48 and an RSI of 54, it's hard to argue against the bearish signals forming.</li>
</ul>
<figure class="wp-block-image size-full"><a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent120424&amp;t=be2bearmibe3na1"><img loading="lazy" decoding="async" width="628" height="490" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/12/04114207/Screenshot-2024-12-04-at-5.48.37-PM.png" alt="" class="wp-image-676882" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/12/04114207/Screenshot-2024-12-04-at-5.48.37-PM.png 628w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/12/04114207/Screenshot-2024-12-04-at-5.48.37-PM-300x234.png 300w" sizes="(max-width: 628px) 100vw, 628px" /></a></figure>
<a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent120424&amp;t=be2bearmibe3na1" target="_blank" rel="noreferrer noopener">Chart created using Benzinga Pro</a>
<ul>
<li>U.S. Treasury 30 Year Bond ETF: Last but not least, this ETF is also struggling to hold onto its gains. Its price at $44.35 isn't enough to offset the pressure from the moving averages. Although the short-term outlook has some bullish signs, the 50-day SMA crossing below the 200-day indicates a tough road ahead.</li>
</ul>
<figure class="wp-block-image size-full"><a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent120424&amp;t=be2bearmibe3na1"><img loading="lazy" decoding="async" width="628" height="490" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/12/04114221/Screenshot-2024-12-04-at-5.49.13-PM.png" alt="" class="wp-image-676884" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/12/04114221/Screenshot-2024-12-04-at-5.49.13-PM.png 628w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/12/04114221/Screenshot-2024-12-04-at-5.49.13-PM-300x234.png 300w" sizes="(max-width: 628px) 100vw, 628px" /></a></figure>
<a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent120424&amp;t=be2bearmibe3na1" target="_blank" rel="noreferrer noopener">Chart created using Benzinga Pro</a>
With a surge in long-term Treasury yields, it's clear that the long bond party might be winding down. Investors betting on these ETFs are facing an uphill battle, and a higher interest rate environment seems to be taking its toll. 
For those holding these three ETFs, it might be time to re-evaluate your exposure to these long-duration bonds before the Death Cross turns into a market-wide plunge.
Read Next:
<ul>
<li><a href="https://www.benzinga.com/24/11/42167098/microsofts-death-cross-tech-giant-faces-a-double-blow-with-ftc-pressure">Microsoft&#8217;s Death Cross: Tech Giant Faces A Double Blow With FTC Pressure</a></li>
</ul>
Photo: Shutterstock

Long-Term Treasury ETFs Hit Death Cross As Yields Rise, Bonds Tumble

The Federal Reserve&#8217;s recent policy decision kept interest rates unchanged, continuing since July 2023. However, it announced a significant reduction in its quantitative tightening (QT) program, <a href="https://www.benzinga.com/federal-reserve">starting in June</a>. 
QT involves selling off assets to decrease money supply and raise interest rates. This move follows massive bond purchases during the pandemic, which suppressed interest rates. While QT can help control inflation, it also reduces liquidity in the economy and can lead to higher interest rates and tighter monetary conditions. 
The Fed aims to avoid a repeat of the 2019 &#8220;repo crisis&#8221; caused by QT, and plans to scale back QT to $25 billion, more than half of its current rate.
Related: <a href="https://www.benzinga.com/economics/macro-economic-events/24/05/38584705/federal-reserve-takes-cautious-stand-on-inflation-powell-signals-preference-for-r">Federal Reserve Takes Cautious Stand On Inflation, Powell Signals Preference For Rate Cuts Over Hikes</a>
<h1 class="wp-block-heading">Redditors Question the Effectiveness of Fed&#8217;s Decision</h1>
Reddit discussions on r/stocks provided valuable insights into the Federal Reserve&#8217;s recent decision to reduce quantitative tightening (QT) and its potential impact on inflation and the economy. 
Redditors expressed diverse opinions, ranging from concerns about inflation to the Fed&#8217;s motives and the broader economic implications.
Redditors like jigglyjohnson13 questioned the effectiveness of the Fed&#8217;s decision, citing concerns about inflation and the M2 money supply. They suggested that the Fed may be influenced by the theory that COVID-19 relief caused an explosion in M2, making it challenging to bring inflation down.
Others, such as 95Daphne and goodbodha, believe that the Fed&#8217;s decision is driven by the need to maintain stability in the banking system. They argue that the Fed is trying to prevent a financial accident, similar to what happened in the past, and ensure that banks have sufficient reserves.
Some, like Malamonga1 and Invest0rnoob1, see the Fed&#8217;s decision as a means to stimulate the economy. They suggest that while the decision may not directly address inflation, it could prevent a crash and support banks facing challenges.
<blockquote class="wp-block-quote">&#8220;I think the economy is doing worse than they are admitting. It's mostly being propped up by government spending. They are slowing QT to prevent a crash.&#8221;
<cite>Redditor <a href="https://www.reddit.com/r/stocks/comments/1chwj1e/comment/l25cvuh/?utm_source=share&amp;utm_medium=web3x&amp;utm_name=web3xcss&amp;utm_term=1&amp;utm_content=share_button">Invest0rnoob1</a></cite></blockquote>
<h1 class="wp-block-heading">Impact On Investment Strategies</h1>
Redditors like fairlyaveragetrader believe the Fed&#8217;s decision could impact investment strategies. They suggest the decision could make long-term bonds more attractive and lead to lower rates over the next 18 months, affecting stock investments and overall market outlook.
<blockquote class="wp-block-quote">&#8220;Inflation is really only being pushed by two things, housing and auto insurance and neither of those are responsive to QT. What the Fed did today is tell you to buy bonds. The fact they are slowing down the selling is going to make the long end more attractive. Rates overall, over the next 18 months, likely to fall.&#8221;
<cite>Redditor <a href="https://www.reddit.com/r/stocks/comments/1chwj1e/comment/l25wz4a/?utm_source=share&amp;utm_medium=web3x&amp;utm_name=web3xcss&amp;utm_term=1&amp;utm_content=share_button">fairlyaveragetrader</a></cite></blockquote>
ETFs such as the iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>), the Vanguard Long-Term Treasury ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/VGLT#NASDAQ">VGLT</a>), and the SPDR Portfolio Long Term Treasury ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPTL#NYSE">SPTL</a>) provide exposure to long-term Treasury bonds. The iShares 7-10 Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/IEF#NASDAQ">IEF</a>) is a popular way to get exposure to medium-to-long-term Treasury bonds.
The diverse opinions expressed by Redditors highlight the complexity of the Federal Reserve&#8217;s decision-making process and its potential impact on various aspects of the economy. 
Investors should consider these perspectives when analyzing the implications of the Fed&#8217;s decision on their investment strategies.
Read Next: <a href="https://www.benzinga.com/news/earnings/24/05/38593416/wall-street-inches-up-post-fed-chipmakers-rebound-gold-crude-falter-whats-driving-market-thursday">Wall Street Inches Up After Powell&#8217;s Inflation Remarks; Chipmakers Rebound; Gold, Crude Falter: What&#8217;s Driving Markets Thursday?</a>
Illustration created using artificial intelligence via MidJourney.

Social Media

Economics

Federal Reserve

iShares Trust Barclays 7-10 Year Treasury Bond Fund

SPTL

Redditors Question Change To Fed Policy: Are They 'Slowing QT To Prevent A Crash'?

In recent weeks, several bond exchange-traded funds (ETFs) have experienced a significant surge in inflows, indicating a <a href="https://www.benzinga.com/money/best-bond-etf">heightened interest among investors. </a>
This shift coincided with a market that significantly upped bets on Federal Reserve rate cuts for 2024, backed by a robust and ongoing <a href="https://www.benzinga.com/topic/inflation">disinflationary trend</a> in the U.S. economy. 
Speculators have gone as far as factoring in an initial rate cut as early as March 2024, with whispers of a total of five rate cuts by December 2024.
But which bond ETFs are currently piquing investors&#8217; interest?
<h2 class="wp-block-heading">From &#8216;Cash-Like&#8217; to &#8216;Equity-Like&#8217;</h2>
While the third quarter in 2023 witnessed a notable uptick in inflows into cash-linked bond ETFs, primarily those investing in short-dated Treasury bonds and bills, the latest trends are veering towards more aggressive fixed-income strategies.
Investors are strategically positioning themselves in anticipation of an imminent U-turn in Fed&#8217;s monetary policy stance, eyeing a select group of bond ETFs that have weathered the storm during the recent spate of interest rate hikes.
Their bullish stance on riskier bond ETFs underscores a burgeoning belief that the bond market landscape could undergo a substantial recalibration in the coming months, as they brace for a more accommodating monetary policy environment.
These ETFs encompass a diverse range, including long-term Treasury bonds, emerging-market bonds, and high-yield corporate bonds. 
<h2 class="wp-block-heading">Top 10 Bond ETFs by Fund Inflows in the Past Month</h2>
<figure class="wp-block-table"> 
<table>
<thead>
<tr>
<th>Name</th>
<th>Fund Flows (1-month)</th>
</tr>
</thead>
<tbody>
<tr>
<td>iShares Trust &#8211; iShares iBoxx $ High Yield Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HYG#NYSE">HYG</a>)</td>
<td>$3.69 bn</td>
</tr>
<tr>
<td>iShares Trust &#8211; iShares Core U.S. Aggregate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AGG#NYSE">AGG</a>)</td>
<td>$2.62 bn</td>
</tr>
<tr>
<td>SPDR Series Trust &#8211; SPDR Bloomberg High Yield Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/JNK#NYSE">JNK</a>)</td>
<td>$1.99 bn</td>
</tr>
<tr>
<td>iShares Trust &#8211; iShares J.P. Morgan USD Emerging Markets Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/EMB#NASDAQ">EMB</a>)</td>
<td>$1.89 bn</td>
</tr>
<tr>
<td>iShares Trust &#8211; iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>)</td>
<td>$1.62 bn</td>
</tr>
<tr>
<td>Vanguard Bond Index Funds &#8211; Vanguard Total Bond Market ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BND#NASDAQ">BND</a>)</td>
<td>$1.56 bn</td>
</tr>
<tr>
<td>iShares Trust &#8211; iShares Broad USD High Yield Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USHY#NYSE">USHY</a>)</td>
<td>$1.31 bn</td>
</tr>
<tr>
<td>Vanguard Scottsdale Funds &#8211; Vanguard Long-Term Treasury ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/VGLT#NASDAQ">VGLT</a>)</td>
<td>$665.99 bn</td>
</tr>
<tr>
<td>Vanguard Charlotte Funds &#8211; Vanguard Total International Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BNDX#NASDAQ">BNDX</a>)</td>
<td>$641.06 bn</td>
</tr>
<tr>
<td>iShares Trust &#8211; iShares 5-10 Year Investment Grade Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IGIB#NYSE">IGIB</a>)</td>
<td>$216.67 bn</td>
</tr>
</tbody>
</table>
</figure>
Read Now: <a href="https://www.benzinga.com/etfs/specialty-etfs/23/12/36075348/golds-record-high-why-havent-gold-miners-followed-suit">Gold&#8217;s Record High: Why Haven&#8217;t Gold Miners Followed Suit?</a>
Photo: Shutterstock

Emerging Markets

Specialty ETFs

New ETFs

Emerging Market ETFs

ETFs

BNDX

iShares JPMorgan USD Emerging Markets Bond Fund

IGIB

USHY

Investors Pour Billions To Aggressive Bond ETFs, Banking On Multiple Fed Rate Cuts in 2024

October jobs report numbers missed expectations Friday, and came in at nearly half of September's <a href="https://www.benzinga.com/economics/macro-economic-events/23/11/35589503/labor-market-shows-signs-of-softening-october-payrolls-decline-to-150-000-below-e">reported figures</a>. 
Non-farm payrolls increased by 150,000 jobs in October, registering a steep decline from September's 297,000 jobs. The figure fell short of market forecasts, which stood at 180,000. One key reason for the deceleration is likely the <a href="https://www.benzinga.com/topic/uaw">United Auto Workers strikes</a>, which resulted in a net loss of jobs for the manufacturing sector.
<h2 class="wp-block-heading">Market Reaction To The US Jobs Report</h2>
Treasury yields tumbled across the board. The yield on the two-year Treasury fell to 4.87%, a decrease of more than 10 basis points, while the 10-year Treasury yields fell by 11 basis points to 4.56%. The benchmark Treasury yield has declined this week from recent highs, when it occasionally traded above the 5% threshold.
The dip in yields led to gains in exchange-traded funds invested in T-bonds. At the time of writing, these ETFs were recording the following price action Friday: 
<ul>
<li>iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) was up 1.59%.</li>
<li>Vanguard Long-Term Treasury ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/VGLT#NASDAQ">VGLT</a>) gained 1.58%.</li>
<li>iShares 7-10 Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/IEF#NASDAQ">IEF</a>) gained 1.03%.</li>
<li>SPDR Bloomberg 1-3 Month T-Bill ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BIL#NYSE">BIL</a>) was up 0.02%.</li>
<li>iShares 1-3 Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SHY#NASDAQ">SHY</a>) was up 0.19%.</li>
</ul>
Also Read: <a href="https://www.benzinga.com/economics/macro-economic-events/23/11/35570015/october-jobs-report-expected-to-show-dip-heres-how-markets-may-react">October Jobs Report Expected To Show Dip — Here&#8217;s How Markets May React</a>
<h2 class="wp-block-heading">5 Economists React To NFPs Report</h2>
Joseph Brusuelas, chief economist at RSM US LLP, said the moderation in the pace of hiring points towards a cooler pace of growth and inflation. This could actually be needed by the American economy, which has been hiring and expanding at a torrid pace in recent months, he said. 
Lawrence Yun, chief economist at NAR, sees the Federal Reserve pivoting from raising interest rates to the neutral stance it has now to eventually cutting interest rates next year. &#8220;Be ready for more home buyers and more home sellers,&#8221; he said. 
Oliver Rust, head of product at Truflation, said the unemployment figures suggest the effect of monetary policy tightening is not feeding through to the labor market in a meaningful way. As such, he warns that an interest rate hike in December may be back on the table.
Brad McMillan, CIO for Commonwealth Financial Network, said the job report will help keep the Fed on the sidelines going forward. Since the dip in job numbers was anticipated, McMillan said the actual numbers — adjusted for the UAW strike — are probably better than the report ,indicating that despite the slowdown, job growth remains healthy overall.
Chris Zaccarelli, CIO for Independent Advisor Alliance, said the jobs report is one to trigger a &#8220;risk-on rally&#8221; into year-end. &#8220;Given that jobs growth is slowing and the unemployment rate is ticking up slightly, that is the kind of data that will keep the Fed on hold and both stock and bond prices should move higher (bond yields lower) in the absence of a more aggressive Fed, &#8221; he said. 
&#8220;The market climbs a wall of worry and we may see many more gains — in the form of a short squeeze and FOMO — before the next bear market begins,&#8221; he said. 
Read Next: <a href="https://www.benzinga.com/economics/macro-economic-events/23/10/35272828/economists-see-recession-risk-waning-end-of-fed-rate-hikes-how-could-treasury-etf">Economists See Recession Risk Waning, End Of Fed Rate Hikes: How Could Treasury ETFs React To Yields?</a>
Photo via Shutterstock.

Analyst Color

Macro Economic Events

Sector ETFs

Broad U.S. Equity ETFs

Econ #s

iShares Trust Barclays 1-3 Year Treasury Bond Fund

Much-Needed Cooling Off Or Risk-On Rally Ahead? Yields Tumble, Bonds Gain After October Jobs Report

The Federal Reserve&#8217;s commitment to maintaining higher interest rates for longer has unleashed seismic tremors within the bond market, culminating in an explosive surge in yields across all maturity periods. Initially, the reverberations were absorbed by 2-year yields, a segment that had historically been swift to react to policy <a href="https://www.benzinga.com/federal-reserve">cues from Powell and the Fed. </a>
But as investors adjust their interest rate projections, the intense surge in Treasury yields is now extending its reach to longer-term maturities.
At the latest FOMC meeting, the Fed left the rate unchanged in the 5.25%-5.50% range, but macroeconomic projections indicated a median preference for another rate hike in 2023, and trimmed the rate-cut scenario to only 50 basis point in 2024, down from a full percentage <a href="https://www.benzinga.com/economics/macro-economic-events/23/09/34772413/jerome-powell-signals-caution-economic-data-to-determine-if-more-interest-rate-hi">point in June&#8217;s projections. </a>
<h2 class="wp-block-heading">Chart: 10-Year And 30-Year Treasury Yields Soar To Over A Decade High</h2>
<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="541" src="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/09/25115920/US10Y_2023-09-25_17-58-56_7bbca-1024x541.png" alt="" class="wp-image-112211" srcset="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/09/25115920/US10Y_2023-09-25_17-58-56_7bbca-1024x541.png 1024w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/09/25115920/US10Y_2023-09-25_17-58-56_7bbca-300x159.png 300w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/09/25115920/US10Y_2023-09-25_17-58-56_7bbca-768x406.png 768w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/09/25115920/US10Y_2023-09-25_17-58-56_7bbca-1536x812.png 1536w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/09/25115920/US10Y_2023-09-25_17-58-56_7bbca.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
Monday witnessed an astonishing milestone as the yield on the benchmark 10-year Treasury bond rocketed to over 4.50%, a threshold not seen since October 2007.
Simultaneously, the yields on 30-year Treasury securities scaled to 4.62%, marking their highest level since February 2011.
These dramatic increases are primarily driven by rising real rates, directly influenced by the Fed&#8217;s policy stance.
The ramifications of this towering escalation in long-term Treasury yields are far-reaching as they directly influence a slew of real economy products, including auto loans, credit cards and mortgage rates. 
As these yields ascend, the cost of borrowing for both consumers and businesses ascends in tandem, potentially triggering a deceleration in economic growth.
<h2 class="wp-block-heading">Carnage Unleashed: Long-Term Treasury ETFs in Turmoil</h2>
Exchange-traded funds (ETFs) linked to long-term Treasuries are bearing the brunt of these yield surges. 
The iShares 20+ Year Treasury Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NYSE">TLT</a>), the largest Treasury-related ETF with $38 billion in assets under management, experienced a 1.9% decline on Monday, reaching its lowest level in over a decade. This marks the ETF&#8217;s fifth consecutive week of losses, the worst losing streak in a year. 
Similar declines have been observed in other longer-dated Treasury ETFs, including the SPDR Portfolio Long-Term Treasury ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPTL#NYSE">SPTL</a>) and the Vanguard Long-Term Treasury ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VGLT#NYSE">VGLT</a>), with the latter hitting its lowest level since inception.
The iShares 7-10 Year Treasury Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IEF#NYSE">IEF</a>) fell by 0.5% Monday, reaching levels last seen in April 2011. Since its peak in 2020, the ETF has experienced a 25% decline. 
The iShares 10-20 Year Treasury Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TLH#NYSE">TLH</a>) was also strongly hit, down 1.6% on Monday and by a whopping 44% since March 2020. 
Read Now: <a href="https://www.benzinga.com/economics/macro-economic-events/23/09/34772413/jerome-powell-signals-caution-economic-data-to-determine-if-more-interest-rate-hi">Morgan Stanley Strategist Advocates Defensive Stance As Market Dynamics Shift</a>
Photo: Shutterstock

US 10-Year, 30-Year Yields Hit Decade Highs, Shaking 5 Treasury ETFs

<ul>
<li>On Wednesday, the Federal Reserve is expected to raise interest rates by half of a percentage point and announce the start of reductions to its $9 trillion balance sheet as U.S. central bankers work to combat high inflation.</li>
<li>The decision would lift the Fed&#39;s short-term target policy rate to 0.75% - 1% and set a plan to trim its Treasuries and mortgage-backed securities portfolio by as much as&nbsp;$95 billion a month,&nbsp;<a class="editor-rtfLink" href="https://www.reuters.com/business/finance/feds-racing-raise-rates-how-high-remains-an-open-bid-2022-04-28/" style="color:#4a6ee0; background:transparent; margin-top:0pt; margin-bottom:0pt" target="_blank">writes Reuters</a>.</li>
<li>Markets have priced in further rate increases through this year and into next.</li>
<li>&quot;Powell will continue to have a strong incentive to sound hawkish,&quot; Piper Sandler economist Roberto Perli said this week. &quot;The Fed&#39;s focus these days is 100% on bringing inflation down, and hawkish expectations help that cause.&quot;</li>
<li>In the run-up to this week&#39;s meeting, Powell has said he wants to get rates &quot;expeditiously&quot; to what Fed policymakers regard as a &quot;neutral&quot; range of 2.25%-2.5%, and then higher if needed.</li>
<li>Photo via Wikimedia Commons</li>
</ul>

Government

News

General

ProShares UltraShort Lehman 20+ Year Treasury

Fed Expected To Hike Interest Rate By Half Percentage Point To Curb Inflation

<ul>
<li>Japanese institutional managers are fueling the bond selloff just as the Federal Reserve pares its $9 trillion balance sheet,&nbsp;<a class="editor-rtfLink" href="https://www.bloomberg.com/news/articles/2022-05-01/biggest-treasury-buyer-outside-u-s-quietly-offloads-billions?sref=TBDibEcD" style="color:#4a6ee0; background:transparent; margin-top:0pt; margin-bottom:0pt" target="_blank">writes Bloomberg</a>.</li>
<li>The latest data from BMO Capital Markets show that the largest overseas holder of Treasuries has offloaded almost $60 billion over the past three months.&nbsp;</li>
<li>Bloomberg says that though it may be a small change relative to Japan&#39;s $1.3 trillion stockpile, the divestment threatens to grow.&nbsp;</li>
<li>The monetary path between the U.S. and Japan is diverging evermore, the yen is at 20-year lows, and market volatility stateside is breaking out.&nbsp;</li>
<li>&quot;It&#39;s a significant amount of selling and on par with what we saw in early 2017 from Japan,&quot; said Ben Jeffery, BMO&#39;s rates strategist.&nbsp;</li>
<li>While an aggressive Fed tightening cycle to control inflation could result in multiple 50 basis-point hikes in the coming months, the Bank of Japan remains locked in the endless stimulus.&nbsp;</li>
<li>While the selloff pushed the 10-year U.S. yield to 2.94% on Monday in Asia, buyers who pay to protect against fluctuations in the yen-dollar exchange rate see their effective yields dwindle to just 1.3%.&nbsp;</li>
<li>Hedging costs have risen to 1.55 percentage points.</li>
<li>&quot;Hedge costs are the issue for investing in U.S. Treasuries,&quot; said Eiichiro Miura, the fixed-income department general manager at Nissay Asset Management Corp.</li>
</ul>

Japanese Investors Fuel US Bond Selloff, Find Good Debt Opportunities In Europe: Bloomberg

According to a new report, global sovereign debt is expected to climb to a whopping $71.6 trillion in 2022, while fresh borrowing is also anticipated to remain high,&nbsp;<a class="editor-rtfLink" href="https://www.cnbc.com/2022/04/06/global-government-debt-set-to-soar-to-record-71-trillion-this-year-research.html" style="color:#4a6ee0; background:transparent; margin-top:0pt; margin-bottom:0pt" target="_blank">writes CNBC</a>.
In its second annual Sovereign Debt Index, British asset manager Janus Henderson projected a 9.5% rise in global government debt, driven primarily by the U.S., Japan, and China.
According to the report, global government debt jumped 7.8% in 2021 to $65.4 trillion, while debt servicing costs dropped to $1.01 trillion, an effective interest rate of just 1.6%. However, debt servicing costs are set to rise significantly in 2022, climbing around 14.5% on a constant-currency basis to $1.16 trillion.
&ldquo;The pandemic has had a huge impact on government borrowing &ndash; and the after-effects are set to continue for some time yet. The tragedy unfolding in Ukraine is also likely to pressure Western governments to borrow more to fund increased defense spending,&rdquo; said Bethany Payne, portfolio manager for global bonds at Janus Henderson.
According to the latest global borrowing report from S&amp;P Global Ratings, new sovereign borrowing is expected to reach $10.4 trillion in 2022, almost a third above the average before the Covid-19 pandemic.
&ldquo;We expect borrowing to stay elevated, owing to high debt-rollover needs, fiscal policy normalization challenges posed by the pandemic, high inflation, and polarized social and political landscapes,&rdquo; said S&amp;P Global Ratings credit analyst Karen Vartapetov.

Global Government Debt Expected To Swell To $71 Trillion In 2022: CNBC

1. Pinduoduo Inc (PDD) 
2. Speedway Motorsports, Inc (TRK) 
3. iShares Intermediate-Term Corporate Bond ETF (IGIB) 
4. Fuwei Films (Holdings) Co., Ltd (FFHL) 
5. iShares iBoxx $ Investment Grade Corporate Bond (LQD) 
6. Carbon Black, Inc (CBLK) 
7. Monotype Imaging Holdings Inc (TYPE) 
8. Vanguard Intermediate-Term Corporate Bond ETF (VCIT) 
9. SPDR Portfolio Long Term Treasury ETF (SPTL) 
10. Vanguard Long-Treasury ETF (VGLT)
This list is compiled from an analysis of the Relative Strength Index (RSI) shown on Benzinga Pro&#39;s Screener tool.
&nbsp;

CBLK

FFHL

Citigourp Global Markets 2% Protected Notes Linked To The Djia

TYPE

VCIT

Top 10 Most Overbought Stocks Via Benzinga Pro's Screener Tool For Mon., August 26, 2019

1. Direxion Daily 20-Yr Treasury Bull 3x Shares (TMF) 
2. Vanguard Total International Bond ETF (BNDX) 
3. Infinera Corporation (INFN) 
4. iShares 20+ Year Treasury Bond ETF (TLT) 
5. Vanguard Long-Treasury ETF (VGLT) 
6. Catalyst Pharmaceuticals, Inc. (CPRX) 
7. Vanguard Total Bond Market ETF (BND) 
8. Arcadia Biosciences, Inc (RKDA) 
9. iShares 7-10 Year Treasury Bond&nbsp;ETF (IEF) 
10. Shake Shack, Inc (SHAK)
This list is compiled from an analysis of the Relative Strength Index (RSI) shown on Benzinga Pro&#39;s Screener tool.

CPRX

INFN

RKDA

SHAK

Direxion Daily 20+ Year Treasury Bull 3X Shares

Top 10 Most Overbought Stocks Via Benzinga Pro's Screener Tool For Thu, August 15, 2019

Wall Street suffered its worst week in more than two years with a trade war brewing between the United States and China &mdash; the world&#39;s two biggest economies. The Dow Jones Industrial Average and the S&amp;P 500 tumbled 5.7% and 5.9%, respectively, last week while the Nasdaq Composite Index shed 6.5%.
	Market Impact
	The latest turmoil has sent eight of the 11 S&amp;P 500 sectors into correction territory (decline of at least 10% from the latest peak). Technology, the hot and soaring sector of this year, was the worst performer plunging 7.9% last week as it was caught in a twin attack of the Facebook data scandal and its large foreign operations. Most of the tech companies do business outside the United States and are highly vulnerable to trade disputes.
	While all the tech ETFs saw terrible trading last week, Guggenheim China Technology ETF (NYSE: <a class="ticker" href="/stock/cqqq#NYSE">CQQQ</a>) and iShares Dow Jones US Technology ETF&nbsp;(NYSE: <a class="ticker" href="/stock/iyw#NYSE">IYW</a>) stole the show, tumbling more than 8%.
	Banking stocks also saw steep declines as interest rates plummeted, reversing all their gains made earlier last week. This is because investors who feared a trade war took flight to safety, pushing yields down. The 10-year Treasury yields slipped to a six-week low of 2.792% from 2.83% but ended the week at 2.81%. As such, First Trust Nasdaq Bank ETF&nbsp;(NASDAQ: <a class="ticker" href="/stock/ftxo#NASDAQ">FTXO</a>) and PowerShares KBW Regional Banking Portfolio&nbsp;(NASDAQ: <a class="ticker" href="/stock/kbwr#NASDAQ">KBWR</a>) were the worst hit, losing more than 8.2% last week.
	If the tariff and counter-tariff situation worsens, the Fed could adopt a slow and steady path for rate hike intensifying worry for the banks and the related ETFs.&nbsp; &nbsp;
	Mega cap ETFs, which comprise stocks that derive most of their revenues outside the United States and are prone to trade war risk, also saw tumultuous trading last week with Guggenheim S&amp;P 500 Top 50 ETF&nbsp;(NYSE: <a class="ticker" href="/stock/xlg#NYSE">XLG</a>) and iShares S&amp;P 100 ETF&nbsp;(NYSE: <a class="ticker" href="/stock/oef#NYSE">OEF</a>) declining 6.8%.
	Winners
Gold surged 2.6% last week, marking its biggest weekly gain since September 2017, boosted by investors&#39; drive to safe haven assets. Acting as leveraged plays on underlying metal price, gold miners witnessed more gains than their bullion cousins. That said, Sprott Junior Gold Miners ETF&nbsp;(NYSE: <a class="ticker" href="/stock/sgdj#NYSE">SGDJ</a>) has emerged as a huge winner of the prevailing trade war tension, gaining 7.3% last week.
	The trade war threats have also raised the appeal of the U.S. government bonds tracking the long end of the yield curve. Vanguard Long-Term Government Bond ETF&nbsp;(NASDAQ: <a class="ticker" href="/stock/vglt#NASDAQ">VGLT</a>) and PIMCO 25+ Year Zero Coupon U.S. Treasury Index ETF&nbsp;(NYSE: <a class="ticker" href="/stock/zroz#NYSE">ZROZ</a>) were in the green with 0.4% gains, recouping all the losses made early last week from Fed rate hikes. However, the two funds currently have a Zacks ETF Rank #4 (Sell), suggesting that trade war fears could turn the fate of these products, which often carry a safe haven status.&nbsp; &nbsp;
	Though the small-cap stocks have been the victim of the broad-market sell-off, they hold up much better than the larger ones. This is because small-cap stocks have less international exposure and generate most of their revenues from the domestic market. These pint-sized stocks are less vulnerable to a trade war or any other political issues and could better insulate investors&#39; against retaliation if occurs. Franklin LibertyQ U.S. Small Cap Equity ETF&nbsp;(BATS:FLQS) was the winner in the small-cap space last week, having gained 2.7%.&nbsp;

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. <a href="http://www.zacks.com/registration/pfp/?ALERT=RPT_7BST_LP194&amp;ADID=BENZ_CONTENT_ZER_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;cid=CS-BENZ-FT-296976" target="_blank">Click to get this free report</a>

Currency ETFs

CQQQ

FLQS

FTXO

iShares Dow Jones US Technology Sector Index Fund

KBWR

SGDJ

PIMCO 25+ Year Zeroupon US Treasury Index Fund

ZROZ

Wall Street Sees Worst Week In 2 Years: ETF Winners And Losers

One of the primary reasons investors have embraced exchange-traded funds over the years is lower fees relative to actively managed equivalents. ETF issuers continue rewarding that faith with a &ldquo;race to the bottom&rdquo; outlook on ETF expenses.
Predictably, Vanguard plays a big role in the trend of lower ETF fees, and after a recent spate of fee cuts from rival issuers, the Pennsylvania-based fund giant is again making its low fee presence felt.
On Thursday, Vanguard, the second-largest U.S. ETF issuer, announced fee reductions on 35 mutual fund classes, including 11 ETFs. But before we get to that good news, there is some bad news ... sort of.
<h3>Fee Raise</h3>
Vanguard slightly raised the annual expense ratio on the Vanguard Health Care ETF (NYSE: <a class="ticker" href="/stock/vht#NYSE">VHT</a>) to 0.1 percent from 0.09 percent. Fidelity, one of Vanguard&#39;s chief competitors, offers the ETF industry&#39;s<a href="http://www.benzinga.com/trading-ideas/long-ideas/16/10/8556957/fidelity-has-a-say-in-etf-fee-tussle"> least expensive lineup</a> of sector ETFs.
<h3>Fee Cuts</h3>
The 11 ETF fee cuts unveiled by Vanguard include a significant portion of the issuer&#39;s fixed income lineup. All of the following saw annual fees reduced to 0.07 percent from 0.1 percent:
<ul>
<li>Vanguard Extended Duration Treasury ETF (NYSE: <a class="ticker" href="/stock/edv#NYSE">EDV</a>).</li>
<li>Vanguard Intermediate-Term Bond ETF (NYSE: <a class="ticker" href="/stock/biv#NYSE">BIV</a>).</li>
<li> Vanguard Intmdte Tm Govt Bd ETF (NASDAQ: <a class="ticker" href="/stock/vgit#NASDAQ">VGIT</a>).</li>
<li>Vanguard Long Term Corporate Bond ETF (NASDAQ: <a class="ticker" href="/stock/vclt#NASDAQ">VCLT</a>).</li>
<li>Vanguard Lg Term Govt Bd ETF (NASDAQ: <a class="ticker" href="/stock/vglt#NASDAQ">VGLT</a>).</li>
<li>Vanguard Mortgage Bkd Sects ETF (NASDAQ: <a class="ticker" href="/stock/vmbs#NASDAQ">VMBS</a>).</li>
<lI>and the Vanguard Short Term Corporate Bond ETF (NASDAQ: <a class="ticker" href="/stock/vcsh#NASDAQ">VCSH</a>).</li>
</ul>
Three of Vanguard&#39;s mega-cap equity ETFs now sport annual expense ratios <a href="https://pressroom.vanguard.com/nonindexed/Fact-sheet-first-wave-expense-ratio-changes-122216.pdf">of 0.07 percent</a>, down from 0.09 percent. Those ETFs are the Vanguard Mega Cap ETF (NYSE: <a class="ticker" href="/stock/mgc#NYSE">MGC</a>), Vanguard Mega Cap 300 Growth Index ETF (NYSE: <a class="ticker" href="/stock/mgk#NYSE">MGK</a>) and the Vanguard Mega Cap Value Index ETF (NYSE: <a class="ticker" href="/stock/mgv#NYSE">MGV</a>).
<h3>Fee Wars</h3>
&ldquo;In 2004, when Vanguard managed $6 billion in ETF assets, the average expense ratio for Vanguard&rsquo;s ETFs was 0.22 percent. Today, Vanguard manages $593 billion in U.S. ETF assets. The average expense ratio of the firm&rsquo;s ETFs is 0.12 percent, or less than one-third that of the 0.53 percent industry average,&rdquo; said Vanguard<a href="https://pressroom.vanguard.com/news/Press-release-VG-announces-first-wave-expense-ratio-changes-12-22-16.html"> in a statement</a>.
Vanguard&#39;s latest fee cuts answer <a href="https://www.benzinga.com/trading-ideas/long-ideas/16/12/8824318/blackrock-fee-cuts-extend-into-smart-beta-realm">two such moves </a>this year, including one this month, by rival BlackRock, Inc. (NYSE: <a class="ticker" href="/stock/blk#NYSE">BLK</a>) and one fee reduction announcement by Charles Schwab Corp (NYSE: <a class="ticker" href="/stock/schw#NYSE">SCHW</a>).

Long Ideas

SCHW

VCLT

VCSH

VGIT

VMBS

Vanguard Has Its Say In ETF Fee War

One of the primary reasons advisors and investor love Vanguard exchange traded funds are the low fees. Pennsylvania-based Vanguard, the third-largest U.S. ETF issuer, has some of the lowest fees in the ETF business, and the company has consistently shown during its time in the ETF industry that as its funds swell in size, it will pare annual expense ratios.

	&nbsp;

	Forgive the Christmas comparison, but Santa arrived a few days early for Vanguard investors this year as the company said Tuesday it is lowering fees on 21 of its ETFs. That includes Vanguard&#39;s group of 10 sector ETFs. With the new, lower fees, Vanguard undercuts rival Fidelity as having the least expensive sector ETFs on the market today.

	&nbsp;

	Previously, Vanguard sector ETFs charged 0.12 percent a year, or $12 per $10,000 on its sector ETFs. Now, the Vanguard Health Care ETF (NYSE: <a class="ticker" href="/stock/vht#NYSE">VHT</a>) sports an annual fee of just 0.09 percent while other popular Vanguard sector offerings, such as the Vanguard Information Technology ETF (NYSE: <a class="ticker" href="/stock/vgt#NYSE">VGT</a>) and the Vanguard Consumer Staples ETF (NYSE: <a class="ticker" href="/stock/vdc#NYSE">VDC</a>), will charge 0.1 percent per year. VGT is known for having <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/10/5941514/with-one-exception-apple-etfs-calm-ahead-of-earnings">one of the largest weights</a> to Apple Inc. (NASDAQ: <a class="ticker" href="/stock/aapl#NASDAQ">AAPL</a>) among all ETFs.&nbsp;

	&nbsp;

	&ldquo;Vanguard continues to set the standard as the industry&rsquo;s low-cost leader, reducing costs not just on a subset of products, but across our funds and ETFs,&rdquo; said Vanguard CEO Bill McNabb <a href="https://pressroom.vanguard.com/content/press_release/Press_Release_Vanguard_Reports_Lower_Expense_Ratios_53_Funds_ETFs_122215.html">in a statement</a>. &ldquo;We have a track record of nearly 40 years of lowering the cost of investing for our clients and we have every intention of continuing to lower the cost of investing.&rdquo;&nbsp;

	&nbsp;

	Eight fixed income ETFs issued by Vanguard also saw annual fees reduced by 17 percent to 0.1 percent from 0.12 percent. The group includes the Vanguard Long-Term Corporate Bond ETF (NASDAQ: <a class="ticker" href="/stock/vclt#NASDAQ">VCLT</a>), Vanguard Long-Term Government Bond ETF (NASDAQ: <a class="ticker" href="/stock/vglt#NASDAQ">VGLT</a>), Vanguard Mortgage-Backed Securities Index ETF (NASDAQ: <a class="ticker" href="/stock/vmbs#NASDAQ">VMBS</a>) and the Vanguard Intermediate-Term Bond ETF (NYSE: <a class="ticker" href="/stock/biv#NYSE">BIV</a>).

	&nbsp;

	Vanguard also announced lower fees on its mega-cap style ETFs. The Vanguard Mega Cap ETF (NYSE: <a class="ticker" href="/stock/mgc#NYSE">MGC</a>) and the Vanguard Mega Cap Value ETF (NYSE: <a class="ticker" href="/stock/mgv#NYSE">MGV</a>) now charge 0.06 percent per year, down from 0.08 percent, while the Vanguard Mega Cap Growth ETF (NYSE: <a class="ticker" href="/stock/mgk#NYSE">MGK</a>) is charging 0.08 percent, down from 0.1 percent.

Intraday Update

AAPL

Vanguard Is At It Again; Lowers Fees On 21 ETFs

On the heels of a pre-Christmas announcement that saw the firm, lower fees on a variety of bond and broader market equity ETFs, Vanguard said today it will lower fees on its 10 sector ETFs. The news is significant because prior to today, State Street's (NYSE: <a class="ticker" href="/stock/stt#NYSE">STT</a>) State Street Global Advisors unit, the second-largest U.S. ETF sponsor, had the lowest fees on major U.S.-focused sector ETFs.

For example, funds such as the Consumer Staples Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlp#NYSE">XLP</a>) and the Technology Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlk#NYSE">XLK</a>) feature expense ratios of 0.18%, which had made the select sector SPDRs ETFs cheaper than their Vanguard equivalents.

Vanguard, the third-largest U.S. ETF issuer, can now wear the crown as the major issuer with lowest-cost sector funds. 

The Vanguard Consumer Discretionary ETF (NYSE: <a class="ticker" href="/stock/vcr#NYSE">VCR</a>), the Vanguard Energy ETF (NYSE: <a class="ticker" href="/stock/vde#NYSE">VDE</a>), the Vanguard Consumer Staples ETF (NYSE: <a class="ticker" href="/stock/vdc#NYSE">VDC</a>), the Vanguard Materials ETF (NYSE: <a class="ticker" href="/stock/vaw#NYSE">VAW</a>) and the Vanguard Utilities ETF (NYSE: <a class="ticker" href="/stock/vpu#NYSE">VPU</a>) have all seen annual expenses lowered to 0.14 percent from 0.19 percent.

The same fee reductions also apply to the Vanguard Health Care ETF (NYSE: <a class="ticker" href="/stock/vht#NYSE">VHT</a>), the Vanguard Industrials ETF (NYSE: <a class="ticker" href="/stock/vis#NYSE">VIS</a>), the Vanguard Information Technology ETF (NYSE: <a class="ticker" href="/stock/vgt#NYSE">VGT</a>) and the Vanguard Telecom Services ETF (NYSE: <a class="ticker" href="/stock/vox#NYSE">VOX</a>).

Pennsylvania-based Vanguard did lower the expense ratio on the Vanguard Financials ETF (NYSE: <a class="ticker" href="/stock/vfh#NYSE">VFH</a>) to 0.19 percent from 0.23 percent, but the Financial Services Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlf#NYSE">XLF</a>) is slightly cheaper at 0.18 percent per year. The firm also said it reduced the fees on the Vanguard Extended Duration Treasury Index ETF (NYSE: <a class="ticker" href="/stock/edv#NYSE">EDV</a>) to 0.12 percent from 0.13 percent. All of the changes take effect immediately.

Vanguard continued to emphasize that it is unique corporate structure allows to deliver cost-saving to investors.

"For Vanguard, our unique client-owned corporate structure is what drives the low costs of our funds.Since we area mutually owned firm, low costs are an outcome that is directly tied to how much it costs us to manage our funds. Economies of scale and a focus on keeping operating costs low have resulted in a long track record of Vanguard lowering costs across the board," <a href="https://advisors.vanguard.com/VGApp/iip/site/advisor/researchcommentary/article/IWE_NewsDec2012ExpenseRatio">the firm said in a statement</a>.

Last week, <a href="http://www.benzinga.com/markets/bonds/12/12/3198204/vanguard-fires-1-more-shot-in-2012-etf-fee-war">Vanguard announced fee cuts on 11 of its ETFs</a>, including the Vanguard Long-Term Government Bond ETF (NASDAQ: <a class="ticker" href="/stock/vglt#NASDAQ">VGLT</a>) and the Vanguard Russell 2000 Index ETF (NASDAQ: <a class="ticker" href="/stock/vtwo#NASDAQ">VTWO</a>).

For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

Short Ideas

VTWO

Vanguard Trims Fees on Sector ETFs

Not surprisingly, Vanguard, the third-largest U.S. ETF sponsor, has something to say about the ongoing 2012 ETF fee battle. Pennsylvania-based, known for being one of the ETF industry's low-cost leaders, announced fee reductions for 11 of its ETFs. The fee reductions took effect last week, <a href="https://advisors.vanguard.com/VGApp/iip/site/advisor/researchcommentary/article/IWE_NewsDec2012ExpenseRatio">according to a statement issued by Vanguard</a>.

The 11 Vanguard ETFs that are now home to lower fees include the Vanguard Intermediate-Term Corporate Bond (NASDAQ: <a class="ticker" href="/stock/vcit#NASDAQ">VCIT</a>), which now has an expense ratio of 0.12 percent down from 0.14 percent. The Vanguard Intermediate-Term Government Bond ETF (NASDAQ: <a class="ticker" href="/stock/vgit#NASDAQ">VGIT</a>), the Vanguard Long-Term Corporate Bond ETF (NASDAQ: <a class="ticker" href="/stock/vclt#NASDAQ">VCLT</a>) and the Vanguard Long-Term Government Bond ETF (NASDAQ: <a class="ticker" href="/stock/vglt#NASDAQ">VGLT</a>) also saw fee reductions to 0.12 percent per year from 0.14 percent.

Other fee reductions include the Vanguard Mortgage-Backed Securities Index ETF (NASDAQ: <a class="ticker" href="/stock/vmbs#NASDAQ">VMBS</a>) going to 0.12 percent from 0.15 percent. The Vanguard Russell 1000 Value Index ETF (NASDAQ: <a class="ticker" href="/stock/vonv#NASDAQ">VONV</a>) now charges 0.15 percent down from 0.16 percent while the Vanguard Russell 2000 Index ETF (NASDAQ: <a class="ticker" href="/stock/vtwo#NASDAQ">VTWO</a>) saw its fees reduced to 0.21 percent from 0.22 percent.

Vanguard lowered fees on another small-cap ETF, taking the expense ratio on the Vanguard Russell 2000 Value Index ETF (NASDAQ: <a class="ticker" href="/stock/vtwv#NASDAQ">VTWV</a>) to 0.32 percent per year from 0.33 percent. The Vanguard Russell 3000 Index ETF (NASDAQ: <a class="ticker" href="/stock/vthr#NASDAQ">VTHR</a>) is now charging 0.15 percent down from 0.16 percent.

The Vanguard Short-Term Corp Bond Index ETF (NASDAQ: VSCH) and the Vanguard Short-Term Government Bond Index ETF (NASDAQ: <a class="ticker" href="/stock/vgsh#NASDAQ">VGSH</a>) both saw fee cuts to 0.12 percent per year from 0.14 percent.

Over the past year, a broad swath of ETF issuers have lowered fees in an effort to attract fresh capital from investors. Vanguard's most recent fee-cut announcement is by no means the firm's first and issuers such as Charles Schwab (NYSE: <a class="ticker" href="/stock/schw#NYSE">SCHW</a>) and State Street's (NYSE: <a class="ticker" href="/stock/stt#NYSE">STT</a>) State Street Global Advisors (SSgA) have announced fee reductions of their own. SSgA is the second-largest U.S. ETF sponsor.

BlackRock's (NYSE: <a class="ticker" href="/stock/blk#NYSE">BLK</a>) iShares, the world's largest ETF issuer and the firm often viewed as Vanguard's primary rival, announced fee cuts of its own earlier this year. In late November, Invesco's (NYSE: <a class="ticker" href="/stock/ivz#NYSE">IVZ</a>) PowerShares unit, the fourth-largest U.S. ETF sponsor, <a href="http://www.benzinga.com/news/12/11/3128183/powershares-fires-its-own-shot-in-etf-fee-war">signaled it would not be left out of the fee war</a> by announcing lower fees on six of its ETFs.

For its part, Vanguard's fee cuts may not be a direct response to what rival firms are doing, but rather the result of the firm's corporate structure and its ability to drive cost savings through economies of scale.

"Other investment firms may lower costs as a business strategy to attract assets," the firm said in the statement. "For Vanguard, our unique client-owned corporate structure is what drives the low costs of our funds. Since we are a mutually owned firm, low costs are an outcome that is directly tied to how much it costs us to manage our funds. Economies of scale and a focus on keeping operating costs low have resulted in a long track record of Vanguard lowering costs across the board."

For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

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Vanguard Fires 1 More Shot in 2012 ETF Fee War

The following exchange traded funds ended the week in the neighborhood of their 52-week highs, though many of them have faced headwinds lately. The share price of each is more than 15% higher than at the beginning of the year as well.

iPath US Treasury 10-year Bull ETN (NASDAQ: <a class="ticker" href="/stock/dtyl#NASDAQ">DTYL</a>) is up more than 43% year to date but has faced resistance at $66 per share since early November. The investment seeks to replicate the performance of the Barclays Capital 10Y U.S. Treasury Futures Targeted Exposure index, which is designed to increase in response to a decrease in 10-year Treasury note yields and to decrease in response to an increase in 10-year Treasury note yields.

iPath US Treasury Long Bond Bull ETN (NYSE: <a class="ticker" href="/stock/dlbl#NYSE">DLBL</a>) is about 34% higher year to date but has pulled back nearly 5% from the 52-week high. The investment seeks to replicate the performance of the Barclays Capital Long Bond U.S. Treasury Futures Targeted Exposure index. The index is designed to increase in response to a decrease in long-dated Treasury bond yields and to decrease in response to an increase in long-dated Treasury bond yields.

Vanguard Long-Term Government Bond Index ETF (NASDAQ: <a class="ticker" href="/stock/vglt#NASDAQ">VGLT</a>) is up more than 25% since the beginning of the year and also has pulled back nearly 5% from the 52-week high. The fund employs a passive management or indexing investment approach designed to track the performance of the Barclays Capital U.S. Long Government Float Adjusted Index, which includes fixed income securities issued by the U.S. Treasury and dollar-denominated foreign debt guaranteed by the U.S. government.

ProShares Ultra Utilities (NYSE: <a class="ticker" href="/stock/upw#NYSE">UPW</a>) is up about 25% since the beginning of the year, after rebounding from a pullback in late November. The investment seeks daily investment results that correspond to twice (200%) the daily performance of the Dow Jones U.S. Utilities Index. Top holdings include Dominion Resources (NYSE: <a class="ticker" href="/stock/d#NYSE">D</a>), Southern Company (NYSE: <a class="ticker" href="/stock/so#NYSE">SO</a>) and Exelon (NYSE: <a class="ticker" href="/stock/exc#NYSE">EXC</a>).

PIMCO 15+ Year US TIPS Index ETF (NYSE: <a class="ticker" href="/stock/ltpz#NYSE">LTPZ</a>) is almost 23% higher year to date after pulling back about 2% in the past week. The investment seeks to provide a total return that closely corresponds to the total return of the BofA Merrill Lynch 15+ Year U.S. Inflation-Linked Treasury Index, which is an unmanaged index comprised of Treasury Inflation Protected Securities with a maturity of at least 15 years.

iPath US Treasury Flattener ETN (NYSE: <a class="ticker" href="/stock/flat#NYSE">FLAT</a>) is up more than 22% since the beginning of the year and like many others on this list has faced headwinds in recent weeks. The underlying index employs a strategy that seeks to capture returns that are potentially available from a “steepening” or “flattening,” as applicable, of the U.S. Treasury yield curve through a notional rolling investment in U.S. Treasury note futures contracts.

UBS E-TRACS 2x Long Alerian MLP Infrastructure ETN (NYSE: <a class="ticker" href="/stock/mlpl#NYSE">MLPL</a>) is about 22% higher since the beginning of the year and within 2% of the 52-week high reached last spring. The investment seeks to replicate twice the monthly performance of the Alerian MLP Infrastructure index, which is a composite of 25 energy infrastructure Master Limited Partnerships.

SPDR Nuveen Barclays Capital Build America Bond (NYSE: <a class="ticker" href="/stock/babs#NYSE">BABS</a>) is up more than 21% year to date but more than 4% below the 52-week high. The fund invests at least 80% of its total assets in the securities comprising the underlying index, which tracks the market for taxable municipal securities designated as “Qualified Bonds” under the Build America Bond program created under the American Recovery and Reinvestment Act of 2009.

iShares Barclays 10-20 Year Treasury Bond (NYSE: TLH) is up almost 19% since the beginning of the year, despite being essentially flat over the past month. The fund generally invests at least 90% of its assets in the bonds of the underlying index, which measures the performance of public obligations of the U.S. Treasury with a remaining maturity of between 10 and 20 years and with capitalization of $250 million or more of outstanding face value.

PowerShares Build America Bond (NYSE: <a class="ticker" href="/stock/bab#NYSE">BAB</a>) is up more than 18% higher year to date despite a recent pullback. The fund invests at least 80% of the total assets in taxable municipal securities eligible to participate in the Build America Bonds program created under the American Recovery and Reinvestment Act of 2009 or other legislation providing for the issuance of taxable municipal securities on which the issuer receives federal support of the interest paid.

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