2020-06-02 00:00:00, Jeff Shen, BlackRock Blog
Content Categorization
/Finance/Investing
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1382
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13.82 min
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Customize your exposure to interest rate risk: With 20 options available spanning different maturity ranges and target years, iShares Treasury bond ETFs can help you target the duration you seek.
Less vanilla than you think
Although U.S. Treasuries are often seen as boring by investors who tend to see news headlines focused on corporate and high yield markets, the Treasury market is actually a very diverse and dynamic place.
The ETFs are balanced monthly by the portfolio management team to keep the funds exposed to the specific part of the Treasury market as specified in the funds' investment objectives, such as 7-10 years or 0-3 months.
In 2014, floating rate Treasury notes (FRNs) were introduced, providing investors with the option to invest in Treasuries whose coupon adjusts based on the prevailing interest rates, and are just 2.3% of the total U.S. Treasury issuance today.
As you can see in the chart below, the net issuance in 2020 is about to double from the levels in 2008-underscoring investor demand for principal protection.
In April 2020, demand for T-bills spiked and something unheard of happened-they briefly had negative yields in the secondary market.
Keywords
Treasury ETFs
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