What an $18 Million Treasury Bet Signals Amid the S&P's 16% Run
Key Points
New Jersey-based GenWealth Group added 52,890 shares of VGLT in the third quarter.
The overall position value increased by $3.21 million from the previous period.
As of September 30, GenWealth reported holding 321,272 VGLT shares valued at $18.27 million.
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New Jersey-based GenWealth Group disclosed a buy of 52,890 shares in the Vanguard Long-Term Treasury ETF (NASDAQ:VGLT), increasing its position by approximately $3.21 million, according to a November 14 SEC filing.
What Happened
According to a filing with the Securities and Exchange Commission dated November 14, GenWealth Group, Inc. increased its stake in the Vanguard Long-Term Treasury ETF (NASDAQ:VGLT) by 52,890 shares during the third quarter, bringing its total holding to 321,272 shares valued at $18.27 million as of September 30.
What Else to Know
The buy brings the VGLT stake to 3.4% of GenWealth Group, Inc.’s 13F reportable assets under management.
Top holdings after the filing:
- NYSEMKT: IAU: $52.44 million (9.77% of AUM)
- NYSEMKT: SCHV: $44.98 million (8.38% of AUM)
- NYSEMKT: VUG: $42.28 million (7.87% of AUM)
- NASDAQ: IEF: $39.81 million (7.41% of AUM)
- NYSEMKT: VOO: $34.76 million (6.47% of AUM)
As of Monday, VGLT shares were priced at $55.81, up 1% over the past year, compared to a 16% gain for the S&P 500 in the same period.
ETF Overview
| Metric | Value |
|---|---|
| AUM | $14.58 billion |
| Yield | 4.33% |
| Price (as of Monday) | $55.81 |
| 1-Year Total Return | 5% |
ETF Snapshot
- Investment strategy: Seeks to track the Bloomberg U.S. Long Treasury Index, focusing on U.S. Treasury bonds with maturities greater than 10 years.
- Portfolio composition: Holds a diversified portfolio of long-term U.S. Treasury securities, excluding inflation-protected and floating rate bonds.
- Expense ratio and structure: Operates as a passively managed ETF, offering investors low-cost exposure to long-duration U.S. government debt.
The Vanguard Long-Term Treasury ETF (VGLT) provides institutional and individual investors with targeted access to the long end of the U.S. Treasury bond market. The fund's strategy emphasizes broad exposure to high-quality government securities with extended maturities, appealing to those seeking income and interest rate sensitivity. VGLT's scale and indexing approach support efficient tracking and competitive pricing for long-term fixed income allocations.
Foolish Take
Long-duration Treasuries were hit hard as yields surged, but that same duration now cuts both ways. With the Vanguard Long-Term Treasury ETF yielding roughly 4.8% on a 30-day SEC basis and charging just a 0.03% expense ratio, the income math looks very different than it did two years ago.
This portfolio is already anchored by broad equity exposure through large allocations to U.S. and international stock ETFs, alongside gold and intermediate Treasuries. With that in mind, adding to long-dated government bonds certainly isn’t a growth call, but it is a volatility and rate-sensitivity hedge layered on top of risk assets that have already enjoyed a strong run. While the S&P 500 gained about 16% over the past year, long Treasuries barely moved, leaving expected forward returns more attractive on a relative basis. In other words, this looks like an intentional diversification move at a time when long Treasuries are lagging, and stocks are winning.
Glossary
ETF (Exchange-Traded Fund): An investment fund traded on stock exchanges, holding assets like stocks or bonds.
13F reportable AUM: Assets under management that must be disclosed by institutional investors in quarterly SEC Form 13F filings.
Dividend yield: Annual dividends paid by a fund or stock, expressed as a percentage of its current price.
Total return: The investment's price change plus all dividends and distributions, assuming those payouts are reinvested.
Trailing annual dividend yield: Dividend yield calculated using dividends paid over the past 12 months.
Expense ratio: The annual fee, as a percentage of assets, charged by a fund to cover operating expenses.
Passively managed ETF: A fund that aims to replicate the performance of a specific index rather than actively selecting investments.
Long-term U.S. Treasury securities: U.S. government bonds with maturities greater than 10 years.
Interest rate sensitivity: The degree to which a bond or fund's value responds to changes in interest rates.
Bloomberg U.S. Long Treasury Index: A benchmark measuring the performance of U.S. Treasury bonds with maturities over 10 years.
Fixed income allocations: The portion of an investment portfolio dedicated to bonds and other debt securities.
Portfolio composition: The mix of asset types and securities held within an investment fund or portfolio.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard Index Funds - Vanguard Growth ETF and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.
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