Investors are piling into big, short Treasury bets alongside Warren Buffett

Investors are currently advised to focus on the shorter-end of the fixed-income market due to concerns and volatility in bond markets. Joanna Gallegos, CEO of BondBloxx, noted that shorter maturities are showing less volatility and stable yields. The 3-month T-Bill is yielding above 4.3%, the two-year at 3.9%, and the 10-year at about 4.4%.

Ultrashort opportunities are attracting the most investors, as seen in ETF flows in 2025. The iShares 0-3 Month Treasury Bond ETF (SGOV) and SPDR Bloomberg 1-3 T-Bill ETF are among the top 10 ETFs in terms of investor flows, with over $25 billion in assets. Vanguard Group’s S&P 500 ETF has attracted the most new money this year, followed closely by SGOV. Warren Buffett’s Berkshire Hathaway has doubled its ownership of T-bills, holding 5% of short-term Treasuries.

Gallegos and Todd Sohn both advise against long-duration bonds in the current market environment. Bond market volatility has increased following the Fed’s rate cuts and concerns about inflation, tariffs, and government spending. Sohn recommends steering clear of bonds with a duration longer than seven years, as yields are around 4.1%.

Gallegos expressed concern that investors are not diversifying their portfolios with bonds, emphasizing the importance of fixed income alongside equities. Sohn suggested looking beyond the U.S. for equity investments, as international equities have been performing well.

While the S&P 500 saw significant returns in recent years, international assets such as the iShares MSCI Eurozone ETF and iShares MSCI Japan ETF have been gaining popularity and delivering strong performances.