SHV ETF

SHV still offers a return in the mid-4% range, making it a core part of my conservative, all-ETF portfolio for nearly 2 years. T-bills, particularly SHV, provide a stable income source and buffer against market volatility, outperforming long-term bond ETFs like TLT in recent years. My 2-ETF model, emphasizing T-bills, has consistently outperformed traditional stock-bond mixes, avoiding significant drawdowns while offering a "free look" at market developments.

The iShares Short Treasury Bond ETF (SHV) is a low-volatility ETF holding short-term Treasuries, ideal for parking idle cash with a low expense ratio of 0.15%. SHV offers interest income on Treasuries, closely tracking short-term interest rates, making it a better alternative to traditional savings accounts. I use SHV to earn interest on idle cash, keeping my checking accounts low to avoid losing potential interest income. That's pretty much the whole purpose of these ETFs.

iShares Short Treasury Bond ETF holds treasury securities maturing in a year or less, tracking the ICE Short US Treasury Securities Index. With a 5.07% yield and minimal duration and credit risk, SHV is a suitable option for cash parking. We go over two ways that you can do better, but that will depend on what exactly you are parking that cash for.

SHV has successfully managed to steer clear of duration risks, which has proven to be a wise decision. Inflation is expected to remain elevated unless significant economic setbacks occur, with maturity walls potentially playing a role in that. Stagflation is not currently a concern, as the necessary conditions for it are not readily apparent. The impact of Phillips Curve dynamics has yet to be fully realized.

SHV: Allows Investors To Avoid Duration Risk While Gaining Exposure To The Dollar

iShares Short Treasury Bond ETF is a fixed income ETF that tracks the ICE Short US Treasury Securities Index. SHV is composed entirely of U.S. Treasury and T-Bill securities, providing a AAA rating and stable cash flows. The fund has a low volatility, a short duration, and offers attractive yields, making it a reliable cash parking vehicle for retail investors.

The latest Middle East conflict between Israel and Palestine boosted the safe-haven demand and dragged down U.S. treasury bond yields.

Short-term interest rates may have peaked, making yield more attractive to investors. iShares Short Treasury Bond ETF offers exposure to short-duration U.S. Treasury bonds for a safe and reliable income stream. SHV is a tax-efficient investment option that has historically not paid out capital gains.

The US economy is expected to continue growing, with Q2 2023 real GDP growth predicted at 2.3%, and full-year real economic growth above 1%. The iShares Short Treasury Bond ETF is recommended as an attractive investment due to its expected yield of over 5.25% and low inflation expectations. SHV is also considered a safe investment option due to potential seasonal headwinds in equity markets and the nearing end of the Fed's rate-hiking cycle.