5 Best Treasury Bond ETFs in 2026

While you can buy Treasuries directly through TreasuryDirect, many investors prefer Treasury bond ETFs because they're easier to buy and sell, available on any brokerage platform, and typically pay interest monthly instead of semiannually.

Treasury ETFs have become a go-to option for adding income, diversification, and downside protection to a portfolio. Here's what you need to know before adding them to yours.

The best Treasury bond ETFs for 2026

Treasury bond ETFs may seem complex if you're used to investing in stocks, but they're actually pretty simple once you understand how they work. In this list, we'll go over some of the biggest, cheapest, and most diversified Treasury bond ETFs available today and help you figure out which one might be right for your portfolio.

1. iShares U.S. Treasury Bond ETF

The Franklin U.S. Treasury Bond ETF (FLGV +0.02%) is actively managed, which means its portfolio managers select specific bonds in an effort to outperform its benchmark, the Bloomberg U.S. Treasury index. While it's still a broad Treasury ETF with exposure to bills, notes, and bonds, the Franklin U.S. Treasury Bond ETF differs by also including Treasury Inflation-Protected Securities (TIPS).

It's more concentrated than its peers, holding fewer than 50 securities. Despite being actively managed, this ETF remains cost-effective with a 0.09% expense ratio, and it offers an SEC yield of 3.89%. Its 5.79-year duration is in line with other intermediate-term Treasury ETFs.

4. Vanguard Intermediate-Term Treasury ETF

ETF providers are constantly competing, so it's not surprising to see near-identical products offered by different firms, right down to the fees and portfolio exposure. If you prefer Schwab over Vanguard for any reason, the Schwab Intermediate-Term U.S. Treasury ETF (SCHR +0.08%) is the logical substitute for the Vanguard Intermediate-Term Treasury ETF.

Both ETFs track the same Bloomberg U.S. Treasury 3-10 Year Index, feature an identical 0.03% expense ratio, and carry the same 4.9-year duration. As of January 2026, this ETF's 30-day SEC yield is 3.79%, roughly equal to the Vanguard Intermediate-Term Treasury ETF. Both ETFs offer efficient, low-cost exposure to the intermediate portion of the U.S. Treasury yield curve.

How Treasury ETFs work

Treasury ETFs hold U.S. government bonds and trade on an exchange like stocks. How they behave depends on their structure. Today, there are three common types.

Single-Treasury ETFs: These hold a single “on-the-run” Treasury, meaning the most recently issued bond for a specific maturity, such as a 10-year or 20-year note. As the bond ages, the ETF’s duration shortens. When the bond matures, the ETF winds down and returns the proceeds to investors.

Target-date Treasury ETFs: These own a basket of Treasury bonds that all mature in the same calendar year. Over time, the portfolio naturally shortens in duration. When the target year arrives, the ETF terminates and distributes its net asset value, similar to how an individual bond returns principal at maturity.

Traditional Treasury ETFs: These hold an ongoing, or “evergreen,” portfolio of Treasury bonds designed to track an index or follow an active strategy. As bonds mature, the fund replaces them with new issues to maintain a constant maturity profile, such as short-term, intermediate, or long-term Treasuries.

Types of Treasury ETFs

• Short-term Treasury ETFs: Focus on bonds that are maturing within one to three years and offer lower interest rate risk with modest yields
• Intermediate-term Treasury ETFs: Hold maturities of three to 10 years and balance income potential with moderate interest rate sensitivity
• Long-term Treasury ETFs: Invest in bonds maturing beyond 10 years and provide higher yield potential with greater price volatility
• STRIPS ETFs: Hold zero-coupon Treasury securities where interest is separated from the principal, producing higher interest rate sensitivity and no periodic income
• TIPS ETFs: Invest in Treasury Inflation-Protected Securities, which adjust principal based on inflation and help preserve purchasing power

Factors to consider before investing in Treasury ETFs

When comparing Treasury ETFs, two of the most important metrics to understand are the 30-day SEC yield and duration.

The 30-day SEC yield reflects the ETF's annualized income based on the past 30 days of interest earned by its holdings, after accounting for expenses. In simple terms, it's the most accurate snapshot of what you can expect to earn in yield if current rates hold.

Duration, on the other hand, measures the ETF's sensitivity to interest rate changes. The higher the duration, the more the fund's price will move inversely to interest rate shifts.

You may also see yield to maturity (YTM) listed, which represents the theoretical total return potential of the ETF's underlying bonds if they were held to maturity.

While it's useful for estimating long-term returns, YTM is less practical for Treasury ETFs since the holdings are frequently rolled over as bonds mature and new ones are added.

How to invest in Treasury bond ETFs

Start by identifying why you want to invest in Treasury bond ETFs. For most investors, the goal is to reduce overall equity risk. Income tends to be a secondary concern since Treasury bond yields are lower than corporate bonds due to minimal credit risk. Once your objective is clear, decide which part of the yield curve you want to target: short, intermediate, or long-term maturities.

Short-term Treasuries are ideal for capital preservation and low volatility. Long-term Treasuries can be powerful hedges during recessions or rate cuts, but they carry more risk if interest rates rise. Most investors opt for intermediate-term exposure or a broad basket that averages to an intermediate duration.

Finally, picking the right Treasury bond ETF often comes down to cost. Most of these ETFs are highly liquid and offer similar yields and durations, so the lower the expense ratio, the better.

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Benefits and risks of investing in Treasury bond ETFs

Key benefits:

• They provide steady monthly distributions, making them useful for income-focused investors.
• Interest is exempt from U.S. state and local taxes, boosting after-tax returns.
• They are backed by the full faith and credit of the U.S. government, making them among the safest credit-quality investments available.

Key risks:

• They can be sensitive to interest rate movements; rising rates reduce bond prices, with longer-maturity Treasury ETFs hit hardest.
• Unlike individual Treasury bonds, most Treasury ETFs can't be held to maturity to guarantee principal repayment.
• The low correlation with stocks doesn't always hold true. In 2022, for example, both Treasuries and equities fell together as inflation and rates spiked.

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