Volume Is Surging In This Lesser-Known Treasury Bond ETF

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January 26, 2017 12:27pm NYSE:GOVT

NYSE:GOVT | News, Ratings, and Charts

A once little-known Treasury Bond ETF from iShares known as GOVT (iShares Core U.S. Treasury Bond, Expense Ratio 0.15%) has sprung to life lately in terms of mushrooming trading volume in the past week or so.


Trailing three-month daily average trading volume of about 1.7 million shares in the fund has rapidly risen to about 3 million shares in the trailing one-month period, thanks to several larger block trading days where volume eclipsed 20 million shares on one occasion. The fund has attracted a notable more than $380 million just year-to-date via creation flows, bringing its asset base to approximately $2.8 billion.

Debuting in in February of 2012, GOVT will be celebrating its five year anniversary since inception next month, and currently it has a 3-star ranking on Morningstar. Operating in the “Treasury Bond” ETF category and thanks to healthy inflow demand, GOVT has grown to become the sixth largest fund in the space in terms of asset size. It ranks behind other more established Treasury Bond funds, all from iShares in fact, including SHY (iShares 1-3 Year Treasury Bond, Expense Ratio 0.15%, $10.9 billion in AUM), IEF (iShares 7-10 Year Treasury Bond, Expense Ratio 0.15%, $7.5 billion in AUM), IEI (iShares 3-7 Year Treasury Bond, Expense Ratio 0.15%, $5.8 billion in AUM), TLT (iShares 20+ Year Treasury Bond, Expense Ratio 0.15%, $5 billion in AUM), and SHV (iShares Short Treasury Bond, Expense Ratio 0.15%, $3.9 billion in AUM).

It would be safe to say that iShares as an issuer has a virtual lockdown on this space in terms of asset supremacy, and across a broad variety of funds at the moment with competing funds from the likes of SPDR, Schwab, and Vanguard for example remaining a distance behind in terms of AUM size. When we look at fund literature for GOVT on the iShares website, we see the following talking points in terms of making the investment case for GOVT. “1) Exposure to U.S. Treasuries ranging from 1-30 year maturities. 2) Low cost access to the broad U.S. Treasury market in a single fund. 3) Use at the core of your portfolio to seek stability in your portfolio and pursue income.” We see one hundred seventeen individual bonds within the portfolio at present and a yield of 1.40%.

GOVT

The iShares U.S. Treasury Bond ETF (NYSE:GOVT) was trading at $24.89 per share on Thursday afternoon, down $0.03 (-0.12%). Year-to-date, GOVT has declined -0.16%, versus a 2.58% rise in the benchmark S&P 500 index during the same period.

GOVT currently has an ETF Daily News SMART Grade of B (Buy), and is ranked #11 of 27 ETFs in the Government Bonds ETFs category.


Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.

About the Author: Paul Weisbruch

paul-weisbruchPaul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and ETFTrends.com for instance.

He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.


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