iShares International Treasury Bond ETF faces risks from rising rates and inflation pressures.

The iShares International Treasury Bond ETF (IGOV) is exposed to significant downside risk due to its long duration of 7.43 years amid rising global inflation and geopolitical tensions. Increasing benchmark interest rates, driven by energy supply shocks from the Hormuz crisis, amplify potential capital losses. With over 40% exposure to the EU and 11% to Japan, regions where central banks are focused on inflation control, IGOV's returns are vulnerable. Investors are advised to consider cash yield instruments like FLOT as safer alternatives given the likelihood of further rate hikes and persistent inflation expectations.