How It Hits 3 Big, Rate-Sensitive ETFs

Treasury bond yields are rising again — all the way up to new 52-week highs — and now actually back to levels not seen since for at least the last 10 years.

The 10-Year yield is up to 4.8% and the 30-Year yield has risen to above 4.9%. This increase definitely affects ETFs in different rate-sensitive sectors.

ETF Price Charts:

The most obvious is the iShares 20+ Year Treasury Bond ETF, a closely followed bond benchmark indicator. Here’s how the daily price chart looks now:

Investors have been doing more unloading than buying for months now, so much so that the 50-day moving average (the blue line) crossed below the 200-day moving average (the blue line) back in July. The red-circled area shows the dramatic increase in volume over the last 2 days of selling.

The weekly price chart is here:

The heavy selling volume may be more apparent on this time frame, in the red-circled area. This longer-term Treasury bond ETF has been in sell mode, basically, for quite some time: note how the 50-week moving average crossed below the 200-week moving average in mid-2022.

Here’s the monthly price chart:

It’s apparent how much selling has taken place: the price is now trading below the 200-month moving average — and the 50-month moving average has turned over and is now trending downward.

There appears to be a possible positive divergence on the relative strength indicator (RSI, below the price chart).

The chart below shows the effects of higher Treasury bond yields on the real estate investment trust sector. The Real Estate Select Sector SPDR is a benchmark exchange traded fund for those who follow REITs:

Note how the daily price this week has dropped below the previous support level, the lows of mid-March. Investors are dumping REITs as the higher yields suggest a difficult real estate market going forward.

The weekly chart is here:

You can see clearly how REITs peaked in late 2021 and have basically trended downward since then. The red circled area shows where the 50-week moving average crossed below the 200-week moving average, a heads up for those paying attention. So far, the price is above the October 2022 low but just barely.

Another ETF clearly affected by rising yields is this one: the Invesco DB US Dollar Index Bullish Fund. Here’s the daily chart:

Investors in the U. S. currency like it that Treasury bond yields are rising as it shows that market is becoming serious about inflation fighting. Those buying the dollar ETF believe that this may represent a kind of ultimate confidence in the American economy’s ability to persevere.

The weekly chart is here:

The main thing is how close the fund is to its previous all-time high in September/October 2022. You can see how steadily the price has climbed from July 2023 to the present.

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