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Ultra Short-Term Bond ETF (SGOV) Hits New 52-Week High

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For investors seeking momentum, iShares 0-3 Month Treasury Bond ETF (SGOV - Free Report) is probably on radar. The fund just hit a 52-week high and is up 0.1% from its 52-week low price of $100.01/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed:

SGOV in Focus

iShares 0-3 Month Treasury Bond ETF offers exposure to U.S. Treasury bonds with remaining maturities less than or equal to three months. It has an effective duration of 0.08 years and average maturity of 0.09 years. The product charges 5 bps in annual fees (see: all the Government Bond ETFs here).

Why the Move?

The short-term corner of the Treasury market has been an area to watch lately given the uncertainty and volatility. Soaring inflation and rising interest rates have sparked worries of a recession, compelling invetsors to hoard cash currently. As such, the appeal for cash-like ETFs have been on the rise as investors seek to mitigate the risk of a decline in the stock market. SGOV invests in ultra short-term bonds and look compelling amid the current market turmoil.

More Gains Ahead?

Currently, SGOV has a Zacks ETF Rank #4 (Sell), indicating that some pain might be in store for this product. However, it might remain continue its strong performance given its weighted alpha of 0.12 and a low 20-day volatility of 0.34%.


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