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Top 10 U.S. Treasury Bond ETFs

| April 18, 2012 | Comments (0)

We have combined short-term Treasury Bond ETFs with intermediate term issues. Short-term issues provide what might pass as safe-parking given the shorter duration of bonds in the relevant index. These bonds are continually rolled-over to maintain the character of the index. Investors compromise lower yields for the short duration protection. At the same time given low prevailing current yields fees then become more of an issue. In the following list our choices include both low fees matched by greater liquidity and comparable yields.

Higher yields are available with intermediate bonds. In fact most fixed rate mortgages are priced off 10-year Treasury Bonds. Nevertheless investors seeking higher yield with more duration risk will find something that fits the bill for them.

While current Fed policies favor keeping interest rates low for an “extended period” bond vigilantes as they’re known will dictate actual price and yield policy as determined in the market place. The Fed may engage in more QE (Quantitative Easing) which may entail buying mortgage-backed securities in the open market thus managing yields through more money printing. As long as bond vigilantes remain subdued and accepting of the power of the printing press, lower yields will continue. Eventually the music will stop and yields must rise once again.

It’s ironic given recent downgrades by S&P and a negative outlook for U.S. credit ratings by Moody’s that bond yields have barely budged. This may be the result of many factors including: aging demographics in the U.S. favoring fixed income investments; the relationship between the U.S. and overseas trading partners; a distrust of equity markets by many investors; overseas investors not trusting eurozone bond issues; and, institutions having few alternative choices given their investment mandates. Bond prices currently have seen some profit-taking in 2012 after seeing excellent overall returns in 2011. Should equity markets rally significantly in the future bond markets could perform less well given their historical inverse relationship.

We look at 10 different bond ETF issues including those that are repetitive varying only slightly by holdings and perhaps more so by varying embedded fees and expenses.

We feature a technical view of conditions from monthly chart views. Simplistically, we recommend longer-term investors stay on the right side of the 12 month simple moving average. When prices are above the moving average, stay long, and when below remain in cash or short. Some more interested in a fundamental approach may not care so much about technical issues preferring instead to buy when prices are perceived as low and sell for other reasons when high; but, this is not our approach.

 receive added signals when markets become extended such as DeMark triggers to exit overbought/oversold conditions.

For traders and investors wishing to hedge or speculate, leveraged long and inverse issues are available to utilize from .

 


 

Vanguard Intermediate Treasury ETF 

VGIT follows the Barclays Capital U.S. 3-10 Year Government Index which include income securities issued by the U.S. Treasury (not including inflation-protected bonds) and U.S. government agencies and instrumentalities, as well as corporate or dollar-denominated foreign debt guaranteed by the U.S. government, with maturities between 3 and 10 years. The fund was launched in November 2009. The expense ratio is .15%.

AUM equal $104 M and average daily trading volume is 16.7K shares. As April 2012 the annual dividend yield was 1.58% and YTD return was -0.15%. The one year return was 8.74%.

Data as of April 2012
VGIT Top Ten Holdings & Weightings

  • US Treasury Note 3.625%: 2.79%
  • US Treasury Note 3.625%: 2.45%
  • US Treasury Note 2%: 2.34%
  • US Treasury Note 3.125%: 2.25%
  • US Treasury Note 2.125%: 2.15%
  • US Treasury Note 3.125%: 2.12%
  • US Treasury Note 2.25%: 2.10%
  • US Treasury Note 2.625%: 2.10%
  • US Treasury Note 3.375%: 2.08%
  • US Treasury Note 3.5%: 1.81%

 

 


 

PIMCO 3-7 Year U.S. Treasury ETF 

FIVZ follows the BofA Merrill Lynch 3-7 Year US Treasury Index which is an unmanaged index that tracks the performance of the direct Sovereign debt of the U.S. Government with at least $1 billion in outstanding face value and a remaining term to final maturity of at least 3 years and less than 7 years. It is not possible to invest directly in an unmanaged index. The fund was launched in October 2009.

AUM equal $21M and average daily trading volume is low at 2K shares. (Be careful with market orders.) As of April 2012 the annual dividend yield was 1.15% and YTD return -0.18%. The one year return was 7.05%.

Data as of April 2012
FIVZ Top Ten Holdings & Weightings

  • US Treasury Bond 10.625%: 8.66%
  • US Treasury Note 2.375%: 7.57%
  • US Treasury Bond 7.25%: 6.50%
  • US Treasury Note 3.25%: 5.40%
  • US Treasury Note 3.125%: 5.36%
  • US Treasury Note 1.875%: 5.36%
  • US Treasury Note 3.25%: 5.34%
  • US Treasury Note 3%: 5.32%
  • US Treasury Note 3.125%: 5.17%
  • US Treasury Note 4.125%: 4.82%

 



 

iShares Barclays 1-3 Year Treasury Bond ETF 

SHY follows the Barclays Capital U.S. 1-3 Year Treasury Bond Index. The fund was launched in July 2002. The expense ratio is .15%. AUM equal $10.3M and an average daily trading volume was 1.6M shares.

As of April 2012 the annual dividend was yield was .58% and YTD return -0.11%. The one year return was 1.09%.

Data as of April 2012
SHY Top Ten Holdings & Weightings

  • US Treasury Note 1.25%: 11.30%
  • US Treasury Note 0.25%: 8.50%
  • US Treasury Note 1.75%: 7.08%
  • US Treasury Note 2.25%: 6.77%
  • US Treasury Note 1%: 4.70%
  • US Treasury Note 0.75%: 4.42%
  • US Treasury Note 1.75%: 4.42%
  • US Treasury Note 2.375%: 4.33%
  • US Treasury Note 0.75%: 3.54%
  • US Treasury Note 2.375%: 2.91%

 


 

Vanguard Short-Term U.S. Treasury ETF 

VGSH follows the Barclays Capital U.S. 1-3 Year Government Bond Index This Index includes fixed income securities issued by the U.S. Treasury (not including inflation-protected securities) and U.S. government agencies and instrumentalities, as well as corporate or dollar-denominated foreign debt guaranteed by the U.S. government, all with maturities between 1 and 3 years. The fund was launched in November 2009.

The expense ratio is .15%. AUM equal $167 million and average daily trading volume is 20K shares. As of April 2012 the annual dividend yield was 0.64% and the YTD return was -0.08%. The one year return was 1.09%.

Data as of April 2012
VGSH Top Ten Holdings & Weightings

  • US Treasury Note 0.25%: 3.69%
  • US Treasury Note 0.5%: 3.26%
  • US Treasury Note 0.375%: 3.18%
  • US Treasury Note 0.625%: 2.86%
  • US Treasury Note 0.25%: 2.47%
  • US Treasury Note 0.375%: 2.31%
  • US Treasury Note 0.5%: 2.14%
  • US Treasury Note 2.25%: 2.09%
  • US Treasury Note 4.75%: 2.00%
  • US Treasury Note 0.25%: 1.83%

 



 

Schwab Short-Term U.S. Treasury ETF 

SCHO follows the Barclays Capital U.S. 1-3 Year Treasury Bond Index which measures the performance of U.S. Treasury securities that have a remaining maturity of at least one year and less than three years. The fund was launched in August 2010. The expense ratio is .12%. AUM equal $181M and average daily trading volume was 42.8K shares.

As of April 2012 the annual dividend yield was 0.31% and YTD return was -0.12%. The one year return was 1.10%. Like all Schwab ETFs SCHO trades commission free for Schwab clients.

Data as of April 2012
SCHO Top Ten Holdings & Weightings

  • US Treasury Note 0.25%: 4.56%
  • US Treasury Note 1.125%: 4.34%
  • US Treasury Note 0.375%: 4.31%
  • US Treasury Note 1.75%: 4.20%
  • US Treasury Note 0.25%: 4.13%
  • US Treasury Note 0.5%: 4.12%
  • US Treasury Note 3.125%: 4.09%
  • US Treasury Note 1.25%: 4.04%
  • US Treasury Note 1.875%: 3.74%
  • US Treasury Note 2%: 3.48%

 


 

PIMCO 1-3 Year Treasury ETF 

TUZ follows the BofA Merrill Lynch 1-3 Year US Treasury Index which is an unmanaged index that tracks the performance of the direct sovereign debt of the U.S. Government having a maturity of at least one year and less than three years. It is not possible to invest directly in an unmanaged index. The fund was launched in June 2009.

The expense ratio is .09%. AUM equal $137M and average daily trading volume is 19K shares. As of April 2012 the annual dividend yield was 0.55% and YTD return was -0.23%. The one year return was 0.86%.

Data as of April 2012
TUZ Top Ten Holdings & Weightings

  • US Treasury Note 1.75%: 6.87%
  • US Treasury Note 0.5%: 6.21%
  • US Treasury Note 0.75%: 5.65%
  • US Treasury Note 1%: 4.92%
  • US Treasury Note 0.75%: 4.86%
  • US Treasury Note 0.25%: 4.52%
  • US Treasury Note 0.625%: 4.42%
  • US Treasury Note 0.375%: 4.19%
  • US Treasury Note 1.25%: 4.15%
  • US Treasury Note 0.75%: 4.13%

 


 

iShares Barclays Capital U.S. 7-10 Year Treasury Bond Index ETF 

IEF follows the index bearing the same name. The fund was launched in July 2002. The expense ratio is 0.15%. AUM equals $4.4M and daily trading volume is 853K shares per day.

As April 2012 the annual dividend yield was 1.89% and YTD return -0.55%. The one year return was 14.37%.

Data as of April 2012
IEF Top Ten Holdings & Weightings

  • US Treasury Note 2.125%: 21.73%
  • US Treasury Note 2.625%: 14.54%
  • US Treasury Note 3.625%: 10.97%
  • US Treasury Note 3.125%: 9.73%
  • US Treasury Note 3.625%: 9.67%
  • US Treasury Note 3.5%: 8.04%
  • US Treasury Note 3.125%: 5.98%
  • US Treasury Note 3.625%: 4.71%
  • US Treasury Note 2%: 4.34%
  • US Treasury Note 2.625%: 2.16%



 

iShares 3-7 Year Treasury Bond ETF 

IEI follows the Barclays Capital U.S. 3-7 Year Treasury Bond Index which measures the performance of public obligations of the U.S. Treasury that have a remaining maturity of more than three years and less than seven years. The fund was launched in January 2007. The expense ratio is .15%. AUM equal $2.2M and average daily trading volume is 206K shares.

As of April 2012 the annual dividend yield was 1.21% and YTD return was -0.02%. The one year return was 7.36%.

Data as of April 2012
IEI Top Ten Holdings & Weightings

  • US Treasury Note 2.75%: 6.56%
  • US Treasury Note 1.75%: 6.51%
  • US Treasury Note 3.125%: 6.41%
  • US Treasury Note 3.125%: 5.50%
  • US Treasury Note 2.75%: 5.26%
  • US Treasury Note 2.625%: 3.69%
  • US Treasury Note 4.25%: 3.65%
  • US Treasury Note 1.375%: 3.60%
  • US Treasury Note 2.625%: 3.24%
  • US Treasury Note 3.25%: 3.00%

 


 

Schwab Intermediate Treasury ETF 

SCHR follows the Barclays Capital U.S. 3-10 Year Treasury Bond Index which measures the performance of Treasuries with a maturity of more than three years and less than ten years. The fund was launched in August 2010. The expense ratio is .12%. AUM equal $144M and average daily trading volume is 38K shares.

As of April 2012 the annual dividend yield was 1.14% and YTD return was -0.30%. The one year return was 9.14%. Like all Schwab ETFs SCHR trades commission free for Schwab clients.

Data as of April 2012
SCHR Top Ten Holdings

  • US Treasury Note 2%: 5.05%
  • US Treasury Note 2.75%: 4.30%
  • US Treasury Note 2.5%: 3.21%
  • US Treasury Note 3.125%: 3.14%
  • US Treasury Note 3.25%: 3.12%
  • US Treasury Note 3.25%: 3.07%
  • US Treasury Note 4.75%: 3.05%
  • US Treasury Note 2.375%: 3.02%
  • US Treasury Note 3.125%: 2.92%
  • US Treasury Note 3%: 2.89%

 



 

PIMCO 7-15 Year Treasury ETF 

TENZ follows the BofA Merrill Lynch 7-15 Year US Treasury Index which is an unmanaged index that tracks the performance of the direct Sovereign debt of the U.S. Government with at least $1 billion in outstanding face value and a remaining term to final maturity of at least 7 years and less than 15 years. The fund was launched in September 2009.

The expense ratio is .15%. AUM equal $22.8M and average daily trading volume is less than 4.5K shares. (Again, here you need to watch any market orders.) As of April 2012 the annual dividend yield was 1.72% and YTD return -0.36%. The one year return was 13.61%.

Data as of April 2012
TENZ Top Ten Holdings & Weightings

  • US Treasury Note 3.375%: 12.83%
  • US Treasury Note 3.625%: 11.76%
  • US Treasury Bond 8.125%: 11.73%
  • US Treasury Note 2.625%: 11.70%
  • US Treasury Bond 8.75%: 9.75%
  • US Treasury Bond 7.625%: 9.65%
  • US Treasury Note 3.125%: 7.03%
  • US Treasury Bond 6.25%: 6.43%
  • US Treasury Bond 6%: 5.82%
  • US Treasury Bond 6.5%: 4.48%
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Category: Fixed Income

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