The latest big move in the Treasury market has created an attractive opportunity that could tempt income-hungry investors to shift away from stocks.
The U.S. 2-year Treasury yield topped 3.5% on Thursday, hitting its highest level since November 2007. That’s more than double the dividend yield of the S&P 500, according to Bespoke Investment Group. Bond yields move inverse of prices.
While it can be cumbersome for individuals to buy bonds, there are mutual funds and ETFs, such as the iShares 1-3 Year Treasury ETF #SHY, that can help investors gain exposure to the short end of the Treasury curve.
However, betting on Treasurys does mean investors forfeit some upside potential that comes with holding stocks. The trade could also look less attractive a few years down the line, especially for less active investors said John Luke Tyner, a portfolio manager at Aptus Capital Advisors.
#US #market #bond
