5 Best Performing Fixed Income ETFs

July 10, 2014

2. Vanguard Extended Duration Treasury ETF (EDV | C-46)
Total return: +19.94 percent; Effective duration: 27.13 years

EDV_perf

EDV holds STRIPS, which are zero-coupon Treasury bonds created by stripping coupon payments from principals with maturities between 20-30 years.

Since STRIPS make no intermediate coupon distribution, they are bought at very deep discounts; hence, they’re very sensitive to changes in interest rates. It is a pure duration play on a different level entirely.

 

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