Markets

TLT, MLN Jump As Yield Curve Flattens

Long-term bond ETFs in both the Treasury and muni markets jumped sharply today, as the yield curve flattened amid a broad-based rush to safety.

The $2.9 billion iShares Barclays 20-Year Treasury ETF (NYSEArca:TLT) was trading up more than 2 percent at 3 p.m. EDT, on more than twice its average daily trading volume. It is now up more than 12 percent in August. Other long-term Treasury ETFs delivered similar returns.

Rising prices were concentrated at the long end of the Treasury curve. The iShares Barclays 7-10 Year Treasury ETF (NYSEArca:IEF), for instance, was up just 0.56 percent, while the iShares Barclays Short Treasury Bond ETF (NYSEArca:SHV) was trading flat for the day.

A similar spread was seen in the municipals market, where the Market Vectors Long Municipal Index ETF (NYSEArca:MLN) was up 1.06 percent, while its short-term counterpart (NYSEArca:SMB) was up just 0.85 percent

The S&P 500, for reference, was trading down 5.03 percent at 3 p.m. EDT.

Bond prices rise when yields fall. Today’s rush to safety has pushed yields down sharply, with the 10-year Treasury note falling below 2 percent for the first time ever.

TLT & MLN drop

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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