US Treasury 2 Year Note ETF

UTWO is a passively managed, single-bond fund that invests in the most recently issued, on-the-run, 2-year US Treasury note. The fund is designed for those specifically required to track the 2-year tenor on the yield curve.

The US Treasury 2 Year Note ETF offers easy access to 2-year government bonds, yielding 4.2% with monthly payouts. UTWO's single-bond focus minimizes credit risk and ensures pure exposure to the 2-year US Treasury yield curve. The fund's 0.15% expense ratio is competitive, but concentration risk and potential impact on returns during low-yield periods are considerations.

UTWO: Straightforward 2-Year Access

UTWO offers exposure to 2-year Treasuries with a 1.9-year duration, rolling monthly, and is highly correlated with Fed Funds, reflecting monetary policy changes. The ETF is expected to yield a 6% total return by end-2025, assuming a soft landing and a 3% long-term neutral rate. UTWO's structure focuses on capital gains and serves as an alternative to SHY, useful for arbitrage trades in the yield curve.

UTWO: Buy 2-Year Treasuries As The Fed Eases

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The ECB cut rates by 25bp as widely anticipated, but a slightly hawkish tilt bear flattened the EUR curve, which in our view remains priced aggressively. In the US, as the markets head towards the Fed's first rate cut, the probability of a larger cut rose slightly on Thursday.

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The US Treasury 2 Year Note ETF gives investors exposure to 2-year treasury notes. While both UTWO and TUA should benefit in an adverse economic scenario requiring the Fed to cut interest rates, UTWO's low duration may not be an effective hedge. Instead, I believe the UTWO ETF is best suited for conservative investors who are willing to take on modest duration risk for a potentially higher return compared to treasury bills.

UTWO: Best Suited For Conservative Investors

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After raising it to the level of 5.50%, the Federal Reserve is expected to slash interest rates at some points this year.

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Danielle DiMartino Booth discusses why Jay Powell wants to keep rates high. Should we trust CPI and other economic data coming out?

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UTWO did what I aimed for when I made it a strong buy last October; it produced an annualized total return of over 8% with extremely low risk. But there are other market areas more worthy of my attention, prompting me to lower UTWO to a hold. The 10-2 yield curve spread is narrowing, and if it un-inverts, the recession chatter will get very loud, very soon.

This Recession Indicator Means UTWO's Run May Be Over

UTWO is a fixed-income ETF that invests in 2-year Treasury bonds and cash. The market's expectation of rate cuts is undermining the effectiveness of the Federal Reserve's policy and may lead to longer high rates or even higher rates. This structural and reflexive fact has us eschewing fixed income, especially when the jubilance around a loosening job market may have been a mistake to begin with.

UTWO: Self-Unfulfilling Prophecy Of Lower Rates

I added UTWO to one of my portfolios recently. This fairly new ETF owns the current 2 year US Treasury note. That's it. The 2-year US Treasury yield is at a compelling level, for many reasons. I like the combination of yield and perhaps rare price appreciation from this lower-volatility investment. I also explain how I use it as part of a 2-step portfolio.

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We took a “bucket list” trip to Africa to see the “Great Migration,” the annual wildlife journey. It prompted several market outlook ideas. I offer views on several ETFs for investors to consider researching including RPAR, UTWO, and NUSI, each embodying the traits of different animals. My bottom-line outlook and view: Today's markets are different. Be proactive, consider multiple scenarios, be ready for each one, and consider the potential for "tail risk events."

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The US Treasury 2 Year Note ETF is a new exchange traded fund that purchases the current 'on-the-run' 2-year Treasury and sells it a month later to roll into the new one. It offers a constant maturity and exposure to a specific point in the yield curve, making it a useful tool for complex trades. UTWO can be used for building a treasury ladder, as a building block for more complex trades, as a yield generating vehicle, and for its simplicity.

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Recession is almost certainly coming, likely within 1 to 2 months. Stocks are likely to fall 15% to 30%, and possibly as much as 45% if the United States defaults on its debt in 3 to 4 weeks.

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NEW YORK--(BUSINESS WIRE)--The RBB Fund Complex (“RBB”), a pioneer of the independent series trust is proud to announce that three ETFs on the RBB platform are nominated for recognition at the ETF.com Awards to be announced on May 2, 2023, in New York City. Nominated for Best New ETFs are the Energy & Minerals Group EV, Solar & Battery Materials Futures Strategy ETF (Ticker: CHRG) and the US Treasury 3 Month Bill ETF (Ticker: TBIL).

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On today's edition of ETF Edge with Bob Pisani, VettaFi financial futurist Dave Nadig and F/M Investment's CIO Alexis Morris discussed the return of bonds. ﻿ The 60/40 portfolio, declared dead in 2022, has roared back with a vengeance in 2023.

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For investors wanting the safety of US government debt, the US Treasury 2 Year Note ETF invests based on the ICE BofA Current 2-Year US Treasury Index. For investors believing rates are near their peak, the US Treasury 10 Year Note ETF invests based on the ICE BofA Current 10-Year US Treasury Index.

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It looks like the bond market is recovering from the Federal Reserve's aggressive moves in 2022, so 2023 may be the year for investors to reposition their fixed income holdings. Fixed coupon securities and longer duration holdings could outperform in 2023.

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Bond trading can be a complicated affair even for the most die-hard quantitative market professionals. However, the introduction of single-bond exchange traded funds (ETFs) could possibly pave the way for more traders to enter the bond market via easier access.

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News for US Treasury 2 Year Note ETF ETF (UTWO)