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Top 10 Government and Inflation-Protected Bond ETFs

Let's look at typical choices.

SHY (iShares Barclays 1-3 Year Treasury Bond ETF) follows the Barclays Captal U.S. 1-3 Year Treasury Bond Index. The fund was launched in July 2002. The expense ratio is .15%. AUM (Assets under Management) equal $8.2 billion and an average daily trading volume just under 1M shares. As of mid-September 2011 the annual dividend was $.07 making the current yield  .98% and YTD return .80%. With yields this low you might consider this ETF and its competitors similar to cash on the sidelines or safe-parking.

Competitive issues include Vanguard's VGSH begun in November 2009 with similar holdings and an expense ratio .15%, AUM of $153M, daily trading volume 18K shares and similar returns and yield; Schwab's SCHO tracking the same index but with a slightly lower expense ratio of .12% and AUM of $166M and commission free trading at Schwab; PIMCO's TUZ tracking BofA Merrill Lynch 1-3 Year Treasury Index with an expense ratio of .09% begun in June 2009 with AUM of $112M.

Data as of September 2011

SHY Top Ten Holdings & Weightings

  1. US Treasury Note 1.25%:       14.36%
  2. US Treasury Note 0.75%:       9.00%
  3. US Treasury Note 1.75%:       7.51%
  4. US Treasury Note 1.375%:     6.70%
  5. US Treasury Note 0.75%:       5.56%
  6. US Treasury Note 1%:            5.23%
  7. US Treasury Note 1.125%:     5.06%
  8. US Treasury Note 1.75%:       3.59%
  9. US Treasury Note 1.375%:     3.13%
  10. US Treasury Note 1.375%:     2.65%

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IEF (iShares Barclays Capital U.S. 7-10 Year Treasury Bond Index ETF) follows the index bearing the same name. The fund was launched in July 2002. The expense ratio is .15%. AUM equals $3.3B and daily trading volume is less than 1M shares per day. As of mid-September 2011the annual dividend was $.25 making the current yield .92% and YTD return 10.63%. This is an important sector since it's from this area where mortgage rates are generally priced. Competitive issues abound starting with Vanguard's VGIT, and follows the Barcalys Capital U.S. 3-10 Year Government Index. The fund was launched November 2009. The expense ratio is .15%.  AUM of $62M and average daily trading volume 12K shares; SPDR's ITE (SPDR Barclays Intermediate Term Treasury ETF) follows the index of the same name. The fund was launched in May 2007. The expense ratio is lower at .13%, AUM $220M and average daily trading volume of 20K shares; Schwab's SCHR (Barclays Capital 3-10 year Treasury ETF) follows the index of the same name. The fund was launched August 2010. The expense ratio is is lowest at .12% and features commission free trading for Schwab customers. AUM is $90M and average daily trading volume is 32K shares.

ProShares and Direxion Shares have leveraged long and inverse products available for hedging or speculating.

 

 

 

Data as of May 2011

IEF Top Ten Holdings & Weightings

  1. US Treasury Note 3.625%:     13.14%
  2. US Treasury Note 3.75%:       10.92%
  3. US Treasury Note 3.5%:         9.88%
  4. US Treasury Note 3.375%:     9.68%
  5. US Treasury Note 3.625%:     8.43%
  6. US Treasury Note 3.125%:     8.03%
  7. US Treasury Note 2.75%:       7.88%
  8. US Treasury Note 3.625%:     7.08%
  9. US Treasury Note 2.625%:     6.43%
  10. US Treasury Note 2.625%:     5.78%

TLT (iShares Barclays 20 Year Plus Treasury ETF) follows the index of the same name. The fund was launched in July 2002. The expense ratio is .15%. AUM exceeds $2.8B and average daily trading volume is 13M shares. As of mid-September 2011 the annual dividend was $.32 making the current yield 1.22% and YTD return 18.40%. Alternate choices include Vanguard's VGLT (Barclays Capital U.S. Long Government Bond ETF) follows the index of the same name. The index includes fixed income securities of the U.S. Treasury and U.S. government agencies. The fund was launched in November 2009. The expense ratio is .15%.  AUM equal $43M and average daily trading volume is 15K shares. As of mid-September 2011 the annual dividend was $.19 making the current yield is 1.34% and YTD return 17.85%.

ProShares and Direxion Shares have leveraged long and inverse products available for hedging or speculating.

Data as of September 2011

TLT Top Ten Holdings & Weightings

  1. US Treasury Bond 4.625%:    10.52%
  2. US Treasury Bond 4.375%:    10.17%
  3. US Treasury Bond 4.375%:    10.02%
  4. US Treasury Bond 4.25%:      9.96%
  5. US Treasury Bond 3.875%:    9.39%
  6. US Treasury Bond 4.5%:        8.59%
  7. US Treasury Bond 4.75%:      7.75%
  8. US Treasury Bond 4.25%:      7.32%
  9. US Treasury Bond 4.5%:        5.83%
  10. US Treasury Bond 3.5%:        5.03%

 

 

 

 

IEI (iShares Barclays 3-7 Year Treasury ETF) follows the Barclays Capital U.S. 3-7 Year Treasury Bond Index. The fund was launched January 2007. The expense ratio is .15%. Generally speaking this sector given rollover of assets and reinvestment would follow 5-year Treasury auctions. AUM is $2.1B with average daily trading volume of 246K shares. As of mid-September 2011 the annual dividend was $.19 making the current yield .77%. A competitive issue is from PIMCO's FIVZ  (BoA Merrill Lynch 3-7 Year U.S. Treasury ETF) follows the index of the same name. The fund was launched in October 2009. The expense ratio is .15%. AUM is $21M and average daily trading volume is less than 3K shares.  For the same period the annual dividend was $.09 making the current yield .99% and YTD return 6.35%.

 

Data as of May 2011

IEI Top Ten Holdings & Weightings

  1. US Treasury Note 1.75%:       6.61%
  2. US Treasury Note 2.75%:       6.48%
  3. US Treasury Note 3.125%:     6.36%
  4. US Treasury Note 2.625%:     5.61%
  5. US Treasury Note 3.25%:       5.57%
  6. US Treasury Note 3.125%:     5.52%
  7. US Treasury Note 2.75%:       4.37%
  8. US Treasury Note 4.25%:       3.79%
  9. US Treasury Note 2.625%:     3.72%
  10. US Treasury Note 2.625%:     3.55%

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