ETFs can offer a simple and inexpensive way to gain exposure to US government bonds, and some of them are highly rated by Morningstar’s fund analysts. This comes at a time when the Federal Reserve is cutting interest rates and the market is expecting short-term Treasury bond yields to fall while yields on bonds with longer maturities stay high.
This gap is shown by spread between the two-year and 10-year Treasury yields, which was 0.50 percentage points on Oct. 30, compared with 0.214 percentage points a year ago. For bond investors, a steeper yield curve provides opportunities to capture higher yields in longer-dated bonds.
Europe-domiciled exchange-traded funds investing in US government bonds collected nearly £1.1 billion in net inflows in the third quarter of 2025, ending a streak of four quarters of net outflows.
What Are the Best USD Government Bond ETFs for European Investors?
To help investors find ETFs focused on US Treasuries, we’ve screened 33 ETFs in Morningstar’s USD government bond category for those with Gold and Silver Medalist Ratings.
A Gold rating means Morningstar analysts believe a fund has the greatest chance of outperforming its category over the long term, while a Silver rating means they believe it will outperform its relevant performance benchmark and/or peer group.
A number of different providers’ funds make the list:
- SPDR Bloomberg US Treasury Bond UCITS ETF
- Vanguard USD Treasury Bond UCITS ETF
- Invesco US Treasury Bond 3-7 Year UCITS ETF
- Amundi US Treasury Bond 3-7 UCITS ETF
- Xtrackers US Treasuries ETF 1D
- Amundi US Treasury Bond Long Dated UCITS ETF
- iShares $ Treasury Bond ETF
- iShares $ Treasury Bond 20+ Yr UCITS ETF
- Deka US Treasury 7-10 ETF
- iShares $ Treasury Bond 7-10 Yr UCITS ETF
We screened for ETFs with Gold or Silver Medalist Ratings that manage at least £150 million. None of the 10 ETFs that made it through the screen is actively managed.
Here’s a closer look at the three Gold-rated strategies:
SPDR Bloomberg US Treasury Bond UCITS ETF
The passively managed SPDR Bloomberg US Treasury Bond UCITS ETF gained 4.15% over the past year, performing roughly in line with the average fund in the USD government bond category, which rose 4.13%. The fund placed in the 53rd percentile for performance and performed roughly in line with its benchmark, the Morningstar US Government Bond Index. The £214.1 million fund has gained 1.01% year to date, while the average fund in its category is up 1.22%.
Vanguard USD Treasury Bond UCITS ETF
The £2.2 billion Vanguard USD Treasury Bond UCITS ETF rose 4.09% over the past year. The gain on the passively managed fund was roughly in line with the 4.13% gain on the average fund in the USD government bond category, leaving it in the 64th percentile for performance. The fund performed roughly in line with its benchmark, the Morningstar US Government Bond Index. Year to date, the Vanguard fund rose 0.95%, while the average fund in its category rose 1.22%.
Invesco US Treasury Bond 3-7 Year UCITS ETF
- Morningstar Medalist Rating: Gold
- Morningstar Rating: ★★★★★
Over the past year, the passively managed Invesco US Treasury Bond 3-7 Year UCITS ETF rose 5.01%, while the average USD government bond fund gained 4.13%. The fund placed in the 31st percentile for performance and beat its benchmark, the Morningstar US Government Bond Index, by 0.89 percentage points. The £194.7 million fund has climbed 1.4% year to date, outperforming the average fund in its category, which rose 1.22%.
