As oil prices, military conflicts, and inflation weigh down on the world’s economies, owners of US Treasury bonds are benefitting from capital flight to their safe haven. They’re on track to have their best month of the year. 

Currently up 4.5% excluding dividends with just six trading days before Halloween, BlackRock’s most-traded US Treasury ETF has already surpassed its next-best month this year, February’s 4.24%.

TLT, BlackRock’s widely traded proxy for US Treasury bonds with a 20-year maturity or longer, is trading at $81.38 as of writing time, far above its $76.94 opening price this month.

Interestingly, TLT’s monthly rally measured from September’s close is 4.5%, but it’s actually higher calculated within October as a standalone month.

Because bond prices opened for trading on October 1 lower than they closed on September 30, TLT has technically gained 5.8% so far this month.

To maintain consistency, however, all returns in the above chart are measured from the closing price of each prior month.

Bloomberg attributed October’s rally in the value of US Treasuries to “a global equities selloff,” which has certainly been a contributor. Mechanically, yields have also retraced a bit of their substantial year-to-date gain, so because yields trade inversely to bond prices, the value of Treasuries have risen this month while yields declined.

Specifically, the 10-year yield fell 14.6 basis points to 5.097% in the week ended October 16, its largest weekly yield drop since February 13.

A lower market yield makes existing long bonds worth more, so an ETF packed with them rises in price.

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