For investors seeking momentum, iShares 1-3 Year Treasury Bond ETF (SHY - Free Report) is probably on radar now. The fund just hit a 52-week high, and is up 2.1% from its 52-week low price of $82.83/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 on where it might be headed:
SHY in Focus
SHY targets the short end of the yield curve, holding 75 bonds in its basket. It has a weighted average maturity of 1.92 years and effective duration of 1.87 years. It is a popular and liquid ETF in the Treasury space with AUM of $21 billion and average daily volume of around 3.5 million shares. The product charges 15 bps in annual fees and has 2.09% in 30-day SEC yield (see: all the Government Bond ETFs here).
Why the Move?
The Treasury corner of the fixed income world has been an area to watch lately given a decline in yields. Escalating trade war tensions have raised global growth worries, thereby leading investors’ to safety in the bond market. Additionally, Fed’s cautious approach is also supporting the rally.
More Gains Ahead?
Currently, SHY has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook, Therefore, it is hard to get a handle on its future returns one way or the other. However, a low weighted alpha of 1.90% and a low 20-day volatility of 1.10% for the ETF show that there is still some promise for risk-aggressive investors who want to ride on this surging ETF.
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