Treasury ETFs rise as the U.S. 10 Year dropped to its 100-day moving average

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Exchange traded funds tied to U.S. Treasury bonds showed gains in intraday trading on Tuesday, fueled by a continued drop in yields. The move came into additional focus as the 10-year yield approached a key technical mark, moving close to its 100-day moving average.

Treasury ETFs that capitalized on Tuesday's drop in yields included the iShares Core U.S. Aggregate Bond ETF (NYSEARCA:AGG) and the Vanguard Total Bond Market ETF (NASDAQ:BND). These are the two largest fixed income ETFs with $87.3B and $81.9B assets under management, respectively.

On the day, AGG was +0.7% at around 3:15 p.m. ET, while BND was +0.6%.

In addition, the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) was the top performer of the day, +1.2%. Moreover, the iShares 3-7 Year Treasury Bond ETF (NASDAQ:IEI) was +0.8%, and the longer-term iShares 7-10 Year Treasury Bond ETF (NASDAQ:IEF) was +1%.

The rally in Treasury ETFs came as the U.S. 10 Year Treasury yield dropped 15 basis points on Tuesday to 1.70% and approached its 100-day moving average, a trend line that flattens out day-to-day fluctuations in yield changes.

While TLT, IEI, and IEF outperformed AGG and BND so far, it should be noted that each of them comes with a 0.15% expense ratio, whereas AGG and BND are cheaper alternatives at 0.04%.

See below a six-month chart of the 10-Year Treasury yield as it approaches its 100-day moving average.

Investors continue to search for safety as they pile into U.S. government debt, sending bond prices higher and yields lower in the wake of Russia’s invasion into Ukraine. The 10-Year yield has now slipped 27 basis points over the last two days, touching a near two-month trading low.

As yields continue to dive lower, relief is also added to the U.S. Dollar Index, which is now up 0.7% to 97.33.