Long-duration bonds continue to be one of the least attractive areas of the market, not just in the fixed income space. The iShares Barclays 20+ Year Treasury Bond ETF ([TLT]) broke down to new 52-week lows today with a move below $85.

Long-duration bonds continue to be one of the least attractive areas of the market, not just in the fixed income space. The iShares Barclays 20+ Year Treasury Bond ETF (TLT) broke down to new 52-week lows today with a move below $85. TLT has a near-zero fund score of 0.52 and has not held a fund score above 4.0 since 2020. TLT’s multi-year low is just a couple of boxes away at $83.50. While this may provide some support in the short term, there is not much positive technical evidence. TLT has been prone to quick rallies and sell-offs over the past few years. This has led to plenty of sideways action over the last few years but none of the rallies have led to a sustained trend. With TLT breaking to new 52-week lows, it’s another sign that long-duration bonds are a place to avoid.

On the other side of the yield curve, short duration bonds have a much better technical picture. The iShares Barclays 1-3 Year Treasury Bond ETF (SHY) has a fund of 2.93, just below the acceptable threshold of 3.0 but better than the average fixed income fund score of 2.43. SHY trades on two consecutive buy signals and is two boxes away from reaching its highest level since 2022. With short-duration bonds offering similar yields to long-duration bonds and possessing a better technical picture with lower volatility, they should make up the bulk of fixed income exposure at this time.