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Treasury Bond ETF (EDV) Hits New 52-Week High

Sanghamitra Saha
Robust fundamentals and continued top-line improvement make Cohen & Steers (CNS) an attractive investment option.
Robust fundamentals and continued top-line improvement make Cohen & Steers (CNS) an attractive investment option.

For investors seeking momentum, Vanguard Extended Duration Treasury ETF EDV is probably on radar now. The fund just hit a 52-week high, which is up roughly 15.6% from its 52-week low price of $101.61/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

EDV in Focus

The 82-securities fund seeks to track the performance of the Bloomberg Barclays U.S. Treasury STRIPS 20-30 Year Equal Par Bond Index. Average effective maturity is 25.2 years and average duration is 24.0 years. It charges 7 bps in fees (see all Government Bond ETFs here).

Why the Move?

Bond ETFs have been rallying of late. A dovish Fed which issued downbeat outlook for the U.S. economy in their March meeting, disappointing manufacturing data from the Euro zone, Brexit debacle, no concrete resolution in the US-China trade deal and a slowing Chinese economy led to a severe stock market sell-off on Mar 22 and triggered a safe-haven rally. This, in turn, dragged down long-term treasury bond yields and boosted the fund.

More Gains Ahead?

The fund has a positive weighted alpha of 6.60, which hints at more gains. So, there is definitely still some promise for those who want to ride on this ETF a little longer.

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Vanguard Extended Duration Treasury ETF (EDV): ETF Research Reports
 
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