Longer-maturity Strips are becoming more desirable as investors push back their estimates for when the Fed will begin raising interest rates to 2012. A rate increase of 1 basis point would cause a 30-year Strip with a par value of $1,000 to fall 29.3 basis points, or $2.93 per $1,000 face amount. A Treasury with the same maturity would decline $1.67.
"Zeros are relatively cheap," Hoisington said. "If you're bullish on risk coming down, if you think the long end is going to do better, then zeros are unusually attractive."