PIMCO Treasury bond ETF hits all-time low of $53.73

PIMCO's ZROZ exchange-traded fund was trading at an all-time low of $53.73 per share at the time of writing. Its share price has lost 16% this year. It has lost 21% over the past 12 months, 63% over the past five years and 73% from its March 2020 peak. ZROZ passively tracks a U.S. Treasury Principal STRIPS Index covering bonds with maturities of 25 to 30 years. The fund holds claims on the principal repayments of U.S. Treasury bonds, whose value reflects what those future repayments are worth today. The U.S. government guarantees repayment of the principal. STRIPS pay 0% interest and repay principal only at maturity. ZROZ previously traded above $202 per share when Treasury interest rates were much lower. Higher interest rates have reduced the value of long-term principal repayments. Current 30-year Treasuries pay 5.64% annually, making the principal-only holdings less attractive than bonds that pay interest. The fund's decline reflects the falling value of its holdings rather than active management decisions. At the current share price, every buyer since ZROZ's 2009 inception has lost money excluding dividends. After accounting for dividends, only investors who bought before September 2011 could have made money. ZROZ has paid $3.25 per share in dividends over the trailing 12 months. The fund holds AA-rated assets and charges a 0.15% management fee. Bond traders primarily use ZROZ to trade the value of long-term principal repayments separately from other bond exposures. The fund's prospectus states that an investment in ZROZ is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.