iShares 1-3 Year Treasury Bond ETF (SHY)

treasury-bonds cash-management us-treasury-bonds

Tracks the ICE U.S. Treasury 1-3 Year Bond Index, focusing on short-term U.S. Treasury bonds. SHY has a low expense ratio of 0.15%, making it a cost-effective option for short-term Treasury exposure. The fund distributes dividends monthly, providing regular income to investors. SHY uses a market value weighting methodology, where bonds with larger amounts outstanding have a greater influence on the fund's performance. A key differentiating quality of SHY is its concentration on very short-term Treasury bonds, which typically offer lower interest rate risk compared to longer-term bonds. This makes SHY potentially attractive to conservative investors or those seeking to park cash for short periods with some yield potential. SHY typically holds between 20-30 different Treasury securities, all with maturities between one and three years, providing focused exposure to this specific segment of the bond market.