Close Menu
Fund Focus News
    Facebook X (Twitter) Instagram
    Trending
    • Mutual Fund Promotion and Initial Public Offer expense allowed as business expense
    • BFSI Mutual Funds AUM Surges 37% to ₹48,000 Cr: Rediff Moneynews
    • SBI mutual fund launches AI-powered ‘SmartAssist’ on whatsApp, ET CIO
    • Hyprop sells half of Hyde Park Corner
    • Top 5 Equity Index Funds With up to 195% SIP Return in 6 Months: Rs 25,000 monthly investment in No.1 defence fund has skyrocketed to Rs 2,06,245
    • Siebert Financial Joins Russell 2000 Index, Strengthens Growth Strategy with Tech Investments
    • Allstate Corporation Digital Transformation Strategy Analysis Report 2025
    • Best SIP mutual funds: Top 10 schemes with up to 27% annualised returns — ₹10,000 monthly SIP grows to ₹49 lakh in 10 years – Money News
    Facebook X (Twitter) Instagram
    Fund Focus News
    • Home
    • Bonds
    • ETFs
    • Funds
    • Investments
    • Mutual Funds
    • Property Investments
    • SIP
    Fund Focus News
    Home»ETFs»5 Best Treasury Bond ETFs in 2025
    ETFs

    5 Best Treasury Bond ETFs in 2025

    May 26, 2025


    Treasury bond exchange-traded funds (ETFs) are a popular way for investors to access the safety and stability of U.S. government debt without the hassle of buying individual bonds.

    These exchange-traded funds hold baskets of U.S. Treasury securities, which are backed by the full faith and credit of the U.S. government. That makes them one of the lowest credit risk investments available.

    In times of market volatility or economic uncertainty, investors often move into Treasuries as a flight to safety. These funds also tend to perform well when interest rates are falling, like during recessions, since central banks may cut rates or even restart bond-buying programs (quantitative easing).

    The word bonds on an electronic board.

    Image source: Getty Images.

    While you can buy Treasuries directly through TreasuryDirect, many investors prefer Treasury bond ETFs because they’re easier to buy and sell, available on any brokerage platform, and typically pay interest monthly instead of semiannually.

    Treasury ETFs have become a go-to option for adding income, diversification, and downside protection to a portfolio. Here’s what you need to know before adding them to a portfolio.

    The best Treasury bond ETFs for 2025

    The best Treasury bond ETFs for 2025

    Treasury bond ETFs may seem complex if you’re used to investing in stocks, but they’re actually pretty simple once you understand how they work.

    In this list, we’ll go over some of the biggest, cheapest, and most diversified Treasury bond ETFs available today and help you figure out which one might be right for your portfolio.

    1 – 3

    iShares U.S. Treasury Bond ETF

    The iShares U.S. Treasury Bond ETF (NYSEMKT:GOVT) is the “buy the entire Treasury market” option, excluding inflation-protected and stripped bonds.

    It tracks the ICE U.S. Treasury Core Bond Index, which holds just over 200 U.S. Treasury securities with maturities ranging from one to 30 years.

    The result is a broad, diversified portfolio with intermediate interest rate sensitivity, reflected in an average duration of about 5.7 years.

    As of now, investors can expect a 4.13% 30-day SEC yield, and the fund remains cost-effective with a 0.05% expense ratio, or just $5 per $10,000 investment.

    SPDR Portfolio Treasury ETF

    Even cheaper than the iShares U.S. Treasury Bond ETF, the SPDR Portfolio Treasury ETF (NYSEMKT:SPTL) charges just a 0.03% expense ratio, making it one of the lowest-cost ways to own the entire U.S. Treasury market.

    It tracks the Bloomberg U.S. Treasury index, covering a broad range of government bonds from under one year to 30 years in maturity.

    Like the iShares U.S. Treasury Bond ETF, it excludes inflation-protected securities and stripped bonds but holds a slightly larger portfolio of 279 bonds as of mid-2025.

    The fund has a 5.8-year duration and offers a 4.15% 30-day SEC yield, making it a cost-effective and diversified option for intermediate-term Treasury exposure.

    Franklin U.S. Treasury Bond ETF

    Not all Treasury bond ETFs passively track an index. The Franklin U.S. Treasury Bond ETF (NYSEMKT:FLGV) is actively managed, which means its portfolio managers select
    specific bonds in an effort to outperform its benchmark, the Bloomberg U.S. Treasury index.

    While still a broad Treasury ETF with exposure to bills, notes, and bonds, FLGV differs by also including Treasury Inflation-Protected Securities (TIPS). It’s more concentrated than its peers, holding just 33 securities in mid-2025.

    Despite being actively managed, FLGV remains cost-effective with a 0.09% expense ratio, and it offers a 4.09% 30-day SEC yield. Its 5.8-year duration is in line with other intermediate-term Treasury ETFs.

    4 – 5

    Vanguard Intermediate-Term Treasury ETF

    While ETFs like the last three mentioned hold Treasury bonds across the maturity spectrum, they all average out to an intermediate duration by design.

    That’s intentional. This “goldilocks” segment of the yield curve offers a balance of income and rate sensitivity, making it ideal for broad exposure.

    But investors can also target this part of the Treasury curve more directly with the Vanguard Intermediate-Term Treasury ETF (NASDAQ:VGIT), which tracks the Bloomberg U.S. Treasury 3–10 Year Bond Index.

    Roughly half the fund is in bonds maturing between three and five years, and the other half is in bonds maturing between five and 10 years. The result is a slightly shorter 4.9-year duration, which lowers rate sensitivity a bit.

    Right now, the 30-day SEC yield is 4.01%, and like most Vanguard ETFs, the expense ratio is a rock-bottom 0.03%.

    Schwab Intermediate-Term U.S. Treasury ETF

    ETF providers are constantly competing, so it’s not surprising to see near-identical products offered by different firms, right down to the fees and portfolio exposure.

    If you prefer Schwab over Vanguard for any reason, the Schwab Intermediate-Term U.S. Treasury ETF (NYSEMKT:SCHR) is the logical substitute for the Vanguard Intermediate-Term Treasury ETF. Both ETFs track the same Bloomberg U.S. Treasury 3–10 Year Index, feature an identical 0.03% expense ratio, and carry a 4.9-year duration.

    As of now, this ETF’s 30-day SEC yield is 4.00%, almost matching the Vanguard Intermediate-Term Treasury ETF. Flip a coin — either ETF delivers efficient, low-cost exposure to the intermediate portion of the U.S. Treasury yield curve.

    Related investing topics

    How to invest

    How to invest in Treasury bond ETFs

    Start by identifying why you want to use Treasury bond ETFs in your portfolio.

    For most investors, the goal is safety by reducing overall equity risk. Income tends to be a secondary concern since Treasury bond yields are lower than corporate bonds due to minimal credit risk.

    Once your objective is clear, decide which part of the yield curve you want to target: short, intermediate, or long-term maturities.

    Short-term Treasuries are ideal for capital preservation and low volatility. Long-term Treasuries can be powerful hedges during recessions or rate cuts but carry more risk if interest rates rise.

    Most investors opt for intermediate-term exposure or a broad basket that averages to an intermediate duration.

    Finally, picking the right Treasury bond ETF often comes down to cost. Most of these ETFs are highly liquid and offer similar yields and durations, so the lower the expense ratio, the better.

    FAQ

    Treasury Bond ETFs FAQ

    Are Treasury bond ETFs tax-free?

    angle-down angle-up

    No, Treasury bond ETFs are not fully tax-free. However, the interest income they generate is typically exempt from state and local taxes. For federal tax exemption, you’d need to invest in municipal bond ETFs instead.

    Do Treasury bond ETFs pay interest?

    angle-down angle-up

    Yes, Treasury bond ETFs pay interest in the form of monthly distributions, which come from the semiannual coupons paid by the U.S. Treasury bonds they hold.

    Are Treasury bond ETFs good during a recession?

    angle-down angle-up

    Historically, Treasury bond ETFs have done well during recessions. They produced positive returns during major downturns like the 2007-09 financial crisis and the 2020 COVID-19 market crash.

    What’s the difference between short-term and long-term Treasury ETFs?

    angle-down angle-up

    The difference comes down to the average maturity of the bonds they hold. Short-term Treasury ETFs hold bonds that mature in one to three years, while long-term Treasury ETFs hold bonds that mature in 10 years or more. Long-term ETFs have higher duration, making them more sensitive to interest rate changes.

    Do I have to hold them until maturity?

    angle-down angle-up

    No, you do not have to hold Treasury bond ETFs until maturity, because they don’t have one. These ETFs roll over their portfolios by selling bonds as they near maturity and buying new ones. However, some target-date Treasury ETFs do mature like a bond and will typically have a year in their name, such as “Target 2025.”



    Source link

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Telegram Email

    Related Posts

    REX-Osprey Ethereum, Solana staked ETFs may launch soon as SEC raises no objections

    June 30, 2025

    Top & Flop ETFs of the First Half of 2025

    June 30, 2025

    ETFs Built On Tax Advantage Draw Congressional Scrutiny

    June 30, 2025
    Leave A Reply Cancel Reply

    Top Posts

    Mutual Fund Promotion and Initial Public Offer expense allowed as business expense

    July 1, 2025

    Qu’est-ce qu’un green bond ?

    December 7, 2017

    les cat’ bonds deviennent incontournables

    September 5, 2018

    Quel est le rôle du service des impôts des particuliers (SIP) ?

    May 7, 2020
    Don't Miss
    Mutual Funds

    Mutual Fund Promotion and Initial Public Offer expense allowed as business expense

    July 1, 2025

    CIT Vs Sahara Asset Management Company Pvt. Ltd (Madras High Court) Madras High Court held…

    BFSI Mutual Funds AUM Surges 37% to ₹48,000 Cr: Rediff Moneynews

    July 1, 2025

    SBI mutual fund launches AI-powered ‘SmartAssist’ on whatsApp, ET CIO

    July 1, 2025

    Hyprop sells half of Hyde Park Corner

    July 1, 2025
    Stay In Touch
    • Facebook
    • Twitter
    • Pinterest
    • Instagram
    • YouTube
    • Vimeo
    EDITOR'S PICK

    Why most thematic ETFs fail to deliver

    January 17, 2025

    ETF investing: from zero to hero – episode 1: the ABCs of exchange-traded funds

    October 24, 2024

    A 19th-century shipwreck is filled with Champagne bottles and Sweden won’t allow anyone a sip

    August 7, 2024
    Our Picks

    Mutual Fund Promotion and Initial Public Offer expense allowed as business expense

    July 1, 2025

    BFSI Mutual Funds AUM Surges 37% to ₹48,000 Cr: Rediff Moneynews

    July 1, 2025

    SBI mutual fund launches AI-powered ‘SmartAssist’ on whatsApp, ET CIO

    July 1, 2025
    Most Popular

    ₹10,000 monthly SIP in this debt mutual fund has grown to over ₹70 lakh in 23 years

    June 13, 2025

    ₹1 lakh investment in these 2 ELSS mutual funds at launch would have grown to over ₹5 lakh. Check details

    April 25, 2025

    ZIG, BUZZ, NANC, and KRUZ

    October 11, 2024
    © 2025 Fund Focus News
    • Get In Touch
    • Privacy Policy
    • Terms and Conditions

    Type above and press Enter to search. Press Esc to cancel.