Current price – $110.5
Target price – $110.5
Dividend yield – 5.04%💵
Investment horizon – less than 1 year
Target price – $110.5
Dividend yield – 5.04%💵
Investment horizon – less than 1 year
iShares Short Treasury Bond ETF is an exchange-traded fund managed by BlackRock. It invests in short-term US Treasuries, which are perfectly safe. The assets under management (AUM) are $18.7 bln, making it one of the largest funds in its class. In the context of a high level of the Fed key rate, the iShares Short Treasury Bond ETF offers an attractive level of dividend yield (more than 5% per annum) and stable monthly payments.
Investment thesis
🔼 The decision to cut the Fed key rate is postponed. Recent statistical data from the United States has shown that despite the efforts of the Federal Reserve, the inflation in the country is in no hurry to slow down. The Personal Consumption Expenditures price index, which the Fed considers as a priority indicator of inflation, was at the level of 2.8% y/y, almost the same as the previous month. The indicator is above the Fed target of 2%. Against this background, the policymakers tightened their rhetoric, expecting a longer period of high interest rates.
🔼 Short bonds are a safe solution. Expectations of a longer period of high rates are weighing on bond prices, which move opposite to yields. However, the greatest losses are incurred by long-term securities, while this has practically no effect on short-term ones. The iShares Short Treasury Bond ETF currently gives you an opportunity to lock in a high level of profitability with minimal risk and wait for the key rate to decline.
To open a brokerage account with Unibank Invest, please fill out the application form or contact us at +374 43 004 382.
🔼 The decision to cut the Fed key rate is postponed. Recent statistical data from the United States has shown that despite the efforts of the Federal Reserve, the inflation in the country is in no hurry to slow down. The Personal Consumption Expenditures price index, which the Fed considers as a priority indicator of inflation, was at the level of 2.8% y/y, almost the same as the previous month. The indicator is above the Fed target of 2%. Against this background, the policymakers tightened their rhetoric, expecting a longer period of high interest rates.
🔼 Short bonds are a safe solution. Expectations of a longer period of high rates are weighing on bond prices, which move opposite to yields. However, the greatest losses are incurred by long-term securities, while this has practically no effect on short-term ones. The iShares Short Treasury Bond ETF currently gives you an opportunity to lock in a high level of profitability with minimal risk and wait for the key rate to decline.
To open a brokerage account with Unibank Invest, please fill out the application form or contact us at +374 43 004 382.
‼ Disclaimer
The information is only indicative, is not exhaustive and is provided solely for discussion purposes. The information should not be regarded as a public offer, request or invitation to purchase or sell any securities, financial instruments or services. No guarantees in direct or indirect form, including those stipulated by law, are provided in connection with the specified information and materials. The information presented above cannot be considered as a recommendation for investing funds, as well as guarantees or promises of future profitability of investments. The risk of negative consequences as a result of the use of the above recommendations, opinions and statements is fully borne by the addressee of the information.
Unibank” OJSC is regulated by the Central Bank of Armenia.
#investidea
The information is only indicative, is not exhaustive and is provided solely for discussion purposes. The information should not be regarded as a public offer, request or invitation to purchase or sell any securities, financial instruments or services. No guarantees in direct or indirect form, including those stipulated by law, are provided in connection with the specified information and materials. The information presented above cannot be considered as a recommendation for investing funds, as well as guarantees or promises of future profitability of investments. The risk of negative consequences as a result of the use of the above recommendations, opinions and statements is fully borne by the addressee of the information.
Unibank” OJSC is regulated by the Central Bank of Armenia.
#investidea
