The fallout from the Trump administration’s tariffs hasn’t just rattled equity markets — it’s also had a major impact on the U.S. bond market. Yields have surged, with the 10-year Treasury pushing past 4.5%, even as the U.S. dollar has weakened.
That combination is concerning to seasoned investors. The 10-year yield is a widely watched indicator that reflects investor sentiment about inflation, interest rates and long-term economic growth. It also serves as a benchmark for everything from mortgage rates to corporate borrowing costs.
Traditionally, when stocks sell off sharply, Treasurys rally as investors seek safety. But a rising yield during a market correction signals the opposite — either a loss of faith in bonds as a safe haven or concerns about inflation and growing fiscal strain.
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Investors interested in these shifting dynamics have a few ways to participate. You can buy Treasury securities directly through TreasuryDirect.gov or trade futures contracts, but the simplest and most accessible option for most are Treasury exchange-traded funds (ETFs).
These funds package Treasurys of varying maturities into a transparent, exchange-traded vehicle, with live bid and ask prices just like a stock. Most also pay monthly distributions, making them an efficient tool for income and portfolio positioning.
“Treasury ETFs allow investors to gain exposure through a stock-like instrument that trades on market exchanges,” says Tiana Patillo, financial advisor manager at Vanguard. “A Treasury ETF can provide greater liquidity, diversification and lower transaction costs.”
Here are seven of the best Treasury ETFs to buy in 2025:
| ETF | Expense ratio | 30-day SEC yield |
| Vanguard 0-3 Month Treasury Bill ETF (ticker: VBIL) | 0.07% | 4.2% |
| BondBloxx Bloomberg Six Month Target Duration U.S. Treasury ETF (XHLF) | 0.03% | 4.2% |
| Xtrackers U.S. 0-1 Year Treasury ETF (TRSY) | 0.06% | 4.2% |
| U.S. Treasury 10 Year Note ETF (UTEN) | 0.15% | 4.2% |
| iShares U.S. Treasury Bond ETF (GOVT) | 0.05% | 4.2% |
| iShares iBonds Dec 2030 Term Treasury ETF (IBTK) | 0.07% | 4.0% |
| Vanguard Extended Duration Treasury ETF (EDV) | 0.05% | 5.2% |
Vanguard 0-3 Month Treasury Bill ETF (VBIL)
“Treasurys are perceived to be the safest security available given their extremely low probability of default, as they’re backed by the full faith and credit of the U.S. Treasury Department,” says Jeffrey Johnson, principal and head of fixed-income product at Vanguard. For Treasury exposure, Vanguard’s most conservative option is VBIL, which tracks the Bloomberg U.S. Treasury Bills 0-3 Months index.
VBIL currently offers a 4.2% 30-day SEC yield, calculated as the yield to maturity of the fund’s holdings averaged over the past 30 days, However, this is only a theoretical estimate, and actual monthly income distributions may vary. With a duration of just 0.1 year, VBIL also has minimal sensitivity to interest rate changes and has a fairly stable net asset value (NAV). It carries a 0.07% expense ratio.
BondBloxx Bloomberg Six Month Target Duration U.S. Treasury ETF (XHLF)
“Considering ongoing U.S. economic growth, sticky inflation and the Trump administration’s policies, our view is that investors should stay short in duration in their Treasury exposure, as we expect continued heightened volatility at the long end of the Treasury curve,” says JoAnne Bianco, partner and senior investment strategist at BondBloxx. The next step up on the Treasury yield curve from VBIL is XHLF.
“This six-month target duration Treasury ETF is one of our top picks for 2025 because we like the combination of attractive income potential and low volatility compared to longer-dated U.S. Treasurys,” Bianco explains. “Investors looking to manage cash positions and maintain liquidity should consider XHLF.” The ETF currently pays a 4.2% 30-day SEC yield and undercuts VBIL with a 0.03% expense ratio.
Xtrackers U.S. 0-1 Year Treasury ETF (TRSY)
Since Treasury bills cap out at 52 weeks, investors who want exposure across the entire short end of the curve instead of just the three-months-or-less range offered by VBIL or the six-month focus of XHLF may prefer TRSY. It currently tracks a portfolio of 90 Treasury bills represented by the ICE U.S. Treasury Short Bond Index. TRSY is currently paying a 4.2% 30-day SEC yield with monthly distributions.
“TRSY can serve as a cash management alternative to traditional savings accounts while offering a hedge against interest rate fluctuations,” notes Arne Noack, regional investment head, Xtrackers, Americas, at DWS Group. “Additionally, it is competitively priced, with an expense ratio of 0.06%.” As with VBIL and XHLF, TRSY can substitute for money market funds, although its NAV is not fixed.
U.S. Treasury 10 Year Note ETF (UTEN)
Pure-play exposure to the 10-year Treasury can be achieved through UTEN, a unique single-bond ETF that holds only the most recently issued 10-year note, also known as the “on the run” issue. This contrasts with most bond ETFs that hold baskets of securities with varying maturities and issue dates. When the new 10-year Treasury is issued, UTEN rolls over its portfolio to it.
Unlike an individual 10-year Treasury, UTEN pays interest monthly rather than semiannually and currently offers a 4.2% 30-day SEC yield. While its 0.15% expense ratio is higher than broader Treasury ETFs, it may be an acceptable trade-off for investors seeking precise exposure to a specific part of the yield curve. UTEN is also highly liquid, trading with a minimal 0.02% 30-day bid-ask spread.
[Read: 5 Fixed-Income ETFs for Today’s Fed Interest Rate Policy]
iShares U.S. Treasury Bond ETF (GOVT)
For buy-and-hold investors focused on diversification rather than precision, there’s no need to target a specific maturity. GOVT lets you buy the entire haystack, holding around 200 Treasury securities ranging from one to 30 years in maturity through the ICE U.S. Treasury Core Bond Index. It offers intermediate interest rate sensitivity, with a 5.7-year duration and a 4.2% 30-day SEC yield.
GOVT is well suited for investors looking to simplify their bond exposure. In a balanced 60% stock and 40% bond portfolio, the bond portion is often a mix of Treasurys, mortgage-backed securities and investment-grade corporate bonds. Swapping that exposure for pure Treasurys through GOVT reduces credit risk and increases safety, though it may come at the cost of slightly lower yield.
iShares iBonds Dec 2030 Term Treasury ETF (IBTK)
Most bond ETFs like GOVT constantly roll over their portfolios to match a benchmark, which means they never mature and are always exposed to prevailing interest rates. In contrast, if you hold an individual bond to maturity, you can ignore price fluctuations and count on getting your full principal back — something worth noting in a rising rate environment where bond prices typically fall.
An exception is a special “target maturity” bond ETF like IBTK. This ETF holds a portfolio of U.S. Treasurys that all mature between Jan. 1, 2030, and Dec. 15, 2030. Until then, it pays a monthly distribution — currently with a 4% 30-day SEC yield. When all the underlying bonds mature, the ETF will liquidate and pay out the NAV to shareholders, just like an individual Treasury would.
Vanguard Extended Duration Treasury ETF (EDV)
As a bond ETF rated five out of five on the risk scale, EDV is an anomaly in Vanguard’s lineup. That’s because it holds Treasury Strips, or Separate Trading of Registered Interest and Principal Securities. These are created by stripping the interest and principal payments from regular Treasury bonds and selling them separately, resulting in zero-coupon bonds with no periodic payments.
As a result, EDV has a much higher sensitivity to interest rate changes, with an average duration of 24.1 years. In practice, that means EDV gets hit hard during rising rate environments like 2022. But when rates fall in anticipation of or during a recession, it can rally sharply. During the March 2020 COVID-19 crash, for example, EDV benefited from a strong flight-to-safety effect. The ETF charges a 0.05% expense ratio.
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Update 04/15/25: This story was published at an earlier date and has been updated with new information.
