#CryptoWritersUnite Investing.com - Investors always pay close attention to Treasury bonds and what the latest price and yield movements indicate about the economy. Right now, these movements are signaling investors to stick to the shorter end of the fixed-income market in terms of maturities.

Joanna Gallegos, CEO and founder of BondBloxx ETF, said on "ETF Edge" on CNBC: "There is a lot of worry and volatility, but at the short and medium ends, we are seeing less volatility and stable yields."

Currently, 3-month Treasury bonds offer a yield exceeding 4.25% annually. The 2-year bond offers a yield of 3.92%, while the 10-year bond is around 4.41%. One basis point equals 0.01%, and yields and prices move in opposite directions.

ETFs flows in 2025 show that ultra-short opportunities are attracting the most investors. The iShares 0-3 Month Treasury Bond ETF (SGOV) and SPDR Bloomberg 1-3 T-Bill ETF (BIL) are among the top 10 ETFs by investor flows this year, attracting over $25 billion in assets. The S&P 500 ETF (VOO) from Vanguard Group is the only one that has attracted more new money than SGOV this year, according to ETFAction.com data. Vanguard’s Short Term Bond ETF (BSV) is close behind, having attracted over $4 billion in flows this year, placing it among the top 20 traded ETFs by flows to date.

Todd Sohn, the head of ETF and technology strategy at Strategas Securities, said on "ETF Edge": "Long duration doesn't work right now."

Buffett agrees: Berkshire Hathaway doubles its holdings of short-term Treasury bonds.

Warren Buffett seems to agree, as Berkshire Hathaway has doubled its ownership of short-term Treasury bonds, now holding 5% of total short-term Treasury bonds, according to a recent report from JPMorgan. Berkshire's Treasury holdings rose to $314 billion as of the end of March, making it the fourth-largest global holder of these bonds. A Benzinga report clarified that Berkshire's Treasury holdings surpassed those of foreign banks, the Federal Reserve, and foreign money market funds last year.

Gallegos added: "Volatility has concentrated at the long end. The 20-year bond has flipped from negative to positive five times so far this year."

The volatility in bonds comes after nine months since the Fed began lowering interest rates, a campaign that has since stalled amid fears of a potential return of inflation due to tariffs. Broader market concerns about government spending and deficit levels, especially with a major tax cut bill looming, have added to bond market tensions.

Long-term Treasury bonds and long-term corporate bonds have performed negatively since September, which is very rare, according to Sohn. He said, "The only other time that happened in modern times was during the financial crisis." He added, "It's hard to argue against short-duration bonds right now."

Sohn advises clients to avoid anything with a maturity longer than seven years, which currently yields about 4.1%.

Investment beyond the borders of the United States.

Gallegos expressed concern that investors, amid the volatility in the bond market, are not paying enough attention to fixed income as part of their portfolio mix. She added: "My fear is that investors are not diversifying their portfolios with bonds today, and investors are still suffering from an addiction to stocks on broad concentrated indices burdened with certain tech stocks. They have become accustomed to these double-digit returns."

Stock market volatility has also reached high levels this year. The S&P 500 hit record levels in February, before dropping 20% to reach its lowest point in April, then recently recovering all those losses. While bonds are an important component of long-term investing to protect the portfolio from stock corrections, Sohn said it is also time for investors to look beyond the United States within their equity holdings.

Julia12: "International stocks contribute to portfolios in a way that hasn't happened in a decade. Last year it was Japanese stocks, and this year it's European stocks. Investors shouldn't be burdened with large growth stocks in the United States right now."

The S&P 500 index recorded returns exceeding 20% in 2023 and 2024. The iShares MSCI Eurozone ETF (EZU) has risen 25% so far this year. The iShares MSCI Japan ETF (EWJ) has posted over 25% performance in the two-year period leading up to 2025, and has risen more than 10% this year.