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Best ETFs for Rising Interest Rates

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Higher Treasury yields have been a buzzworthy topic on Wall Street recently – and the trend has investors seeking out the best stocks and ETFs for rising interest rates.

A year ago, interest rates on the closely watched 10-year U.S. Treasury bond were below 0.8%. But by April, that rate had roughly doubled. And while we saw a bit of a rollback over the summer months, the 10-year T-note is now yielding above 1.6%. The short-term trend is pointing to even higher rates in the months ahead; Kiplinger forecasts the 10-year’s yield will reach 1.8% by 2022.

To be clear, these are not “high” rates by any stretch of the imagination. Those who know their market history will recall the 10-year Treasury yield higher than 10% in the early 1980s, rates regularly around 7% in the 1990s and T-notes yielding north of 3% as recently as 2018. By any historical measure, 1.6% is still pretty tame.

That said, the fact we are coming from a lower base means that the percentage change in yields can be quite significant – as evidenced by the fact that rates doubled in a few short months in early 2021. And with swings like this, we can see significant disruptions to certain businesses and asset classes.

Let’s explore seven of the best ETFs for rising interest rates. Many of these funds include some of the best stocks for higher rates and allow you to either profit off the trend of rising interest rates or, in an ideal world, at least sidestep any trouble.

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