--- title: "Exclusive: Why 'Safe' US Treasury ETFs Suffered a 'Perfect Storm for Generational Losses'—And Where Experts Say to Hide Now" type: "News" locale: "en" url: "https://longbridge.com/en/news/294032523.md" description: "Experts warn that long-duration US Treasury ETFs like TLT suffered massive losses due to a misunderstanding of duration risk, confusing zero default risk with zero price risk. Aggressive Fed rate hikes and inflation caused brutal volatility. To preserve capital, strategists recommend shifting away from long-end bonds toward short-term Treasuries (1-5 years), T-Bills, or holding individual bonds to maturity, rather than attempting to buy the dip." datetime: "2026-07-28T07:58:45.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/294032523.md) - [en](https://longbridge.com/en/news/294032523.md) - [zh-HK](https://longbridge.com/zh-HK/news/294032523.md) --- # Exclusive: Why 'Safe' US Treasury ETFs Suffered a 'Perfect Storm for Generational Losses'—And Where Experts Say to Hide Now Investors flocking to long-duration U.S. Treasury ETFs for safety have instead been met with a “perfect storm for generational losses.” This historic crash stems from a fatal market misunderstanding: equating the zero default risk of the U.S. government with zero price risk, leaving supposedly safe bond funds exposed to brutal interest rate shocks and surging volatility. ## **The Duration Trap** **Lawrence Gillum**, Head of Fixed Income for LPL Financial, told Benzinga exclusively that the aggressive Fed rate hiking cycle starting in 2022 battered long-maturity securities that had historically low coupons. This combination created “a perfect storm for generational losses in fixed income markets.” **Louis Navellier**, CIO of Navellier & Associates, points out that the **iShares 20+ Year Treasury Bond ETF** (NASDAQ:TLT) is “a perfect example of duration risk,” highlighting that buyers from March 2020 “have lost over 50% of their principal.” **Charlie Ripley**, Senior Investment Strategist for Allianz Investment Management, adds that retail investors regularly “comingle creditworthiness with price stability.” Because ETFs constantly buy and sell to maintain a target duration, TLT acts more like “a directional view on interest rates rather than a capital preservation tool,” with recent realized volatility mirroring the S&P 500. **Read Also: Michael Burry Warns on Long Bonds: Which Treasury ETFs Are Most — and Least — Exposed?** ## **The ‘Safe Asset’ Illusion** **Renée Friedman**, Global Head of Research at EXANTE, emphasizes that “investors confuse zero default risk with zero price risk because they think just because the government can print the currency in which the bond is denominated, that there is no risk.” She notes inflation, AI capital expenditures, and rising debt levels have severely compounded duration risk. **Alexander Lis**, CIO at SDV, is even more blunt regarding the 44% five-year plunge in TLT: “There is no such thing as a ‘safe asset’.” Lis attributes the underlying weakness to a growing term premium as investors lose hope that policymakers will “properly address the potential spiraling debt growth problem.” ## **Where to Hide Now?** Attempting to buy the dip on long-duration Treasury ETFs right now is widely viewed as a dangerous gamble. Instead, experts suggest the following allocations to preserve capital and capture yield: **Expert** **Firm** **Preferred Strategy** **Rationale** Lawrence Gillum LPL Financial 1–5 Year Treasuries / Short TIPS Avoids the long end; offers attractive income as yields are expected to remain elevated. Dr. Renée Friedman EXANTE “Belly of the Curve” (3-7 Years) Avoids locking in losses on long-end dips amid persistent global policy uncertainty and inflation. Charlie Ripley Allianz T-Bills or 1-Year Notes Provides the absolute highest level of capital preservation, though susceptible to reinvestment risk. Louis Navellier Navellier & Associates Individual Bonds Holding to maturity guarantees par value and eliminates ETF “transaction risk.” **Read Also: Jim Bianco Says Bond Investors Need a Rate Hike as 30-Year Treasury Yield Hits 5.15%: 'When the Fed Starts Panicking, I Can Stop Panicking'** **_Disclaimer:_** _This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors._ Photo Courtesy: Jason Raff on Shutterstock.com ### Related Stocks - [TLT.US](https://longbridge.com/en/quote/TLT.US.md) - [SHV.US](https://longbridge.com/en/quote/SHV.US.md) - [BIL.US](https://longbridge.com/en/quote/BIL.US.md) - [GOVT.US](https://longbridge.com/en/quote/GOVT.US.md) - [IEF.US](https://longbridge.com/en/quote/IEF.US.md) - [UBT.US](https://longbridge.com/en/quote/UBT.US.md) - [TMF.US](https://longbridge.com/en/quote/TMF.US.md) - [TBT.US](https://longbridge.com/en/quote/TBT.US.md) - [TMV.US](https://longbridge.com/en/quote/TMV.US.md) - [TBF.US](https://longbridge.com/en/quote/TBF.US.md) - [TLTW.US](https://longbridge.com/en/quote/TLTW.US.md) - [TSYW.US](https://longbridge.com/en/quote/TSYW.US.md) - [LPLA.US](https://longbridge.com/en/quote/LPLA.US.md) - [ALV.DE](https://longbridge.com/en/quote/ALV.DE.md) - [.SPX.US](https://longbridge.com/en/quote/.SPX.US.md) - [SDV.AU](https://longbridge.com/en/quote/SDV.AU.md) - [ALIZY.US](https://longbridge.com/en/quote/ALIZY.US.md) ## Related News & Research - [JGB futures fall, tracking declines in US Treasury market](https://longbridge.com/en/news/293400704.md) - [JGB futures fall, tracking declines in US Treasury market](https://longbridge.com/en/news/290491606.md) - [US Treasury yields rise, dollar stable amid Fed rate-hike bets](https://longbridge.com/en/news/290428058.md) - [Foreign holdings of US Treasuries rise in April, led by Japan, UK, data shows](https://longbridge.com/en/news/290241245.md) - [TREASURIES-US Treasury yields tick higher; inflation outlook helps cool hike bets](https://longbridge.com/en/news/293199261.md)