Amid rising geopolitical tensions, including the growing conflict between the U.S., Israel and Iran, investor sentiment has begun to shift.
One useful gauge of market psychology is CNN’s Fear and Greed Index, which incorporates indicators such as S&P 500 momentum relative to its 125-day moving average.
Recently, the index has fallen to 28, near the lower end of the “fear” range, just above the threshold for extreme fear at 25. One month ago, the index stood at 51, within the “neutral” range. That shift reflects growing caution among investors as economic data weakens.
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The latest jobs report from the Bureau of Labor Statistics added to those concerns. The economy unexpectedly lost 92,000 jobs in February, a sharp reversal from forecasts that called for more than 55,000 new positions. At the same time, the unemployment rate rose to 4.4%, surprising markets that had expected labor conditions to remain stable.
Together, these developments have revived fears that the U.S. economy could be slowing more quickly than previously anticipated.
An asset class that tends to attract attention during uncertain periods like this is Treasury bonds. These are government-issued securities representing debt obligations of the U.S. When investors buy them, they are lending money to the federal government in exchange for periodic interest payments.
Despite occasional credit rating downgrades in recent years, U.S. Treasurys remain among the most widely trusted and liquid securities in global markets.
“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.
Treasury exchange-traded funds (ETFs) package these bonds into a single tradable fund, allowing investors to gain exposure easily through a brokerage account rather than purchasing individual bonds through TreasuryDirect.
These ETFs also offer practical benefits. Many distribute interest income monthly rather than the semi-annual schedule typical of individual Treasury bonds, and the income is generally exempt from state and local taxes, just like Treasurys themselves.
Here are seven of the best Treasury ETFs to buy in 2026:
| ETF | Expense ratio | 30-day SEC yield |
| Vanguard Total Treasury ETF (ticker: VTG) | 0.03% | 3.9% |
| iShares U.S. Treasury Bond ETF (GOVT) | 0.05% | 3.8% |
| Franklin U.S. Treasury Bond ETF (FLGV) | 0.09% | 3.7% |
| Schwab Short-Term U.S. Treasury ETF (SCHO) | 0.03% | 3.5% |
| Global X 1-3 Month T-Bill ETF (CLIP) | 0.07% | 3.6% |
| State Street SPDR Portfolio Long Term Treasury ETF (SPTL) | 0.03% | 4.7% |
| Pimco 25+ Year Zero Coupon U.S. Treasury Index ETF (ZROZ) | 0.15% | 4.8% |
Vanguard Total Treasury ETF (VTG)
“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.” Vanguard has a variety of Treasury ETFs corresponding to different maturities, but VTG is the diversified “buy the haystack” option.
This ETF passively tracks the Bloomberg U.S. Treasury Total Return Unhedged USD Index. VTG’s underlying portfolio currently consists of 280 Treasury bonds. VTG’s aggregate portfolio interest rate sensitivity sits in the intermediate range, with an average duration of 5.7 years. The ETF charges a 0.03% expense ratio and currently pays a 3.9% 30-day SEC yield with monthly distributions.
iShares U.S. Treasury Bond ETF (GOVT)
Vanguard’s ETF lineup often competes directly with BlackRock’s iShares family of funds, and for broad Treasury exposure, iShares offers GOVT as a counterpart. The ETF is older, having launched in February 2012, and significantly larger, with about $35.9 billion in assets under management (AUM). It is slightly more expensive, however, carrying a 0.05% expense ratio. GOVT pays a 3.8% 30-day SEC yield.
GOVT tracks the ICE U.S. Treasury Core Bond Index, which has an average duration of about 5.8 years. While its exposure is broadly comparable to VTG, the underlying benchmark differs. Because of that distinction, investors may be able to hold GOVT alongside VTG as a tax-loss harvesting partner. This can be useful in years when interest rates rise and Treasury ETFs experience price declines.
Franklin U.S. Treasury Bond ETF (FLGV)
While passive index-based Treasury ETFs such as VTG and GOVT are known for their low costs, fee compression across the ETF industry has also pushed active managers to lower their prices. That has narrowed the gap between passive and active fixed-income ETFs in particular. A good example is FLGV, which despite being actively managed charges a relatively modest 0.09% expense ratio.
FLGV is concentrated, holding just 45 Treasury securities while its benchmark, the Bloomberg U.S. Treasury Index, currently includes 296. Recently, the ETF’s higher-conviction strategy has delivered modest outperformance net of fees. Over the trailing one-year period, FLGV returned 5.3% at net asset value compared to 5.2% for its benchmark. The ETF currently pays a 3.7% 30-day SEC yield.
Schwab Short-Term U.S. Treasury ETF (SCHO)
While broad Treasury ETFs like VTG and GOVT are popular with passive investors looking for portfolio ballast, they may be too general for more active investors. For instance, the intermediate durations of those funds can expose investors to interest rate risk. While that can benefit bond prices when rates fall, it can also lead to meaningful losses when rates rise, as many investors experienced in 2022.
Investors who prioritize lower interest rate sensitivity may prefer a short-duration option such as SCHO. This ETF tracks the Bloomberg US Treasury 1-3 Year Index, which has an average duration of about 1.9 years. The trade-off with SCHO versus VTG or GOVT is lower income potential when the yield curve is not inverted. Currently, SCHO pays a 3.5% 30-day SEC yield. The ETF charges a 0.03% expense ratio.
[Read: 9 Best ETFs to Buy for a Recession.]
Global X 1-3 Month T-Bill ETF (CLIP)
Even short-duration Treasury ETFs like SCHO still carry some interest rate sensitivity. Investors who want to eliminate most of that exposure altogether may prefer a Treasury bill ETF such as CLIP. The fund holds Treasury bills with remaining maturities of at least one month but less than three months. Treasury bills do not pay periodic interest; instead, they are issued at a discount and mature at face value.
Inside an ETF structure, the constant turnover of these short-term securities produces regular distributions. Investors therefore receive monthly payouts without needing to build and manage a Treasury bill ladder. The yield for ETFs like CLIP generally tracks prevailing short-term interest rates. Currently, CLIP pays about a 3.6% 30-day SEC yield and charges a 0.07% expense ratio.
State Street SPDR Portfolio Long Term Treasury ETF (SPTL)
Investors willing to make more directional bets on long-term interest rates may prefer a long-duration Treasury ETF such as SPTL at a 0.03% expense ratio. This ETF tracks the Bloomberg Long U.S. Treasury Index, which currently has an average duration of about 14.6 years. That makes it more than twice as sensitive to rate changes compared with intermediate Treasury ETFs like GOVT or VTG.
The flip side of that volatility is greater upside potential. During recessions, falling yields have historically pushed prices of long-duration bonds sharply higher, providing a strong hedge against equity market drawdowns. This dynamic was evident during the March 2020 COVID-19 market crash, when long-term Treasury ETFs rallied as stocks sold off. SPTL currently pays a 4.7% 30-day SEC yield.
Pimco 25+ Year Zero Coupon U.S. Treasury Index ETF (ZROZ)
SPTL’s 14.6-year duration already makes it highly sensitive to changes in interest rates, but it is far from the most rate-sensitive Treasury ETF available. That distinction generally belongs to funds that hold STRIPS, short for separate trading of registered interest and principal securities. Since STRIPS can be complicated and less accessible for retail investors to trade individually, a better option is ZROZ.
This current benchmark for ZROZ is the BofA Merrill Lynch Long Treasury Principal STRIPS Index. ZROZ is relatively liquid, with a 30-day median bid-ask spread of 0.04%, and it currently pays a 4.8% 30-day SEC yield. However, investors should be prepared for substantial volatility, as ZROZ’s portfolio carries an average duration of roughly 27.9 years. The ETF charges a 0.15% expense ratio.
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7 Best Treasury ETFs to Buy Now originally appeared on usnews.com
Update 03/10/26: This story was published at an earlier date and has been updated with new information.
