🇺🇸 Treasury & TIPS ETFs
🇺🇸 Treasury & TIPS ETFs
US Treasury bonds are backed by the full faith and credit of the US government — the global benchmark for “risk-free” assets. They’re the foundation of all fixed income analysis.
Duration tiers
| Tier | Years | Sensitivity | What It Represents |
|---|---|---|---|
| Short | 1-3 | Low | Cash-like, Fed policy |
| Intermediate | 3-7 | Medium | Near-term outlook |
| Medium | 7-10 | Medium-High | Belly of curve |
| Long | 20+ | High | Long-term expectations |
Key insight: A bond with 10-year duration falls ~10% if rates rise 1%.
ETFs compared
iShares (most liquid)
| ETF | Duration | Expense | Best For |
|---|---|---|---|
| SHY | ~1.9 years | 0.15% | Cash parking |
| IEI | ~4.4 years | 0.15% | Intermediate |
| IEF | ~7.5 years | 0.15% | Balanced duration |
| TLT | ~16.5 years | 0.15% | Duration bets |
| GOVT | ~6.2 years | 0.05% | Full curve |
Vanguard (lower cost)
| ETF | Duration | Expense | iShares Equivalent |
|---|---|---|---|
| VGSH | ~1.9 years | 0.04% | SHY |
| VGIT | ~5.2 years | 0.04% | IEI |
| VGLT | ~16.0 years | 0.04% | TLT |
Extended duration
| ETF | Duration | Expense | What It Tracks |
|---|---|---|---|
| EDV | ~24.5 years | 0.06% | Zero-coupon STRIPS |
EDV holds treasury STRIPS — zero-coupon bonds with maximum duration. Use for aggressive rate cut bets.
TIPS (Inflation-Protected)
TIPS protect purchasing power — the principal adjusts with CPI. The spread between nominal treasuries and TIPS (breakeven inflation) shows market inflation expectations.
| ETF | Duration | Expense | Best For |
|---|---|---|---|
| TIP | ~6.7 years | 0.19% | Broad TIPS |
| SCHP | ~6.6 years | 0.03% | Lowest cost |
| VTIP | ~2.4 years | 0.04% | Short-duration TIPS |
| LTPZ | ~20.2 years | 0.20% | Max inflation sensitivity |
TIP outperforming TLT = inflation expectations rising
TLT outperforming TIP = inflation expectations falling
Quick reference
| Goal | ETF |
|---|---|
| Cash parking | SHY, VGSH |
| Balanced duration | IEF, VGIT |
| Duration play | TLT, VGLT |
| Maximum duration | EDV |
| Inflation hedge (broad) | TIP, SCHP |
| Inflation hedge (low duration) | VTIP |
For most traders: TLT for directional treasury exposure, SHY for cash parking, IEF for balanced duration. Add TIPS when hedging or expressing a view on inflation.
For signal interpretation and trading strategies, see Bond Market Signals.
Last updated on