iShares iBonds Dec 2024 Term Treasury ETF (IBTE)

ETF iShares iBonds Dec 2024 Term Treasury ETF (IBND)

Profile:

iShares iBonds Dec 2024 Term Treasury ETF (IBND): This exchange-traded fund (ETF) aims to track the performance of the ICE U.S. Treasury 7-10 Year Bond Index. It primarily invests in U.S. Treasury bonds with maturities ranging from 7 to 10 years. IBND offers investors a way to gain exposure to the U.S. Treasury market with a specific focus on mid-term maturities.

Target Sector: U.S. Treasury Bonds

Asset Allocation: 100% U.S. Treasury bonds

Investment Strategy: Passive management, tracking the ICE U.S. Treasury 7-10 Year Bond Index

Objective:

The primary investment goal of IBND is to provide investors with:

• Interest income: by holding U.S. Treasury bonds that pay regular interest payments.
• Capital appreciation: through potential price increases of the underlying bonds as they approach maturity.
• Low volatility: compared to other fixed-income investments.
• Liquidity: with relatively high trading volume and narrow bid-ask spreads.

Issuer:

iShares by BlackRock: iShares is a leading provider of exchange-traded funds (ETFs) with over $2.5 trillion in assets under management. BlackRock, the parent company, is a global investment management firm with a strong reputation for financial stability and expertise.

Reputation and Reliability: BlackRock is a well-established and reputable asset manager with a proven track record of managing large and diverse investment portfolios.

Management: The ETF is managed by a team of experienced portfolio managers at BlackRock who are experts in fixed income investing.

Market Share:

IBND is a relatively small ETF within the U.S. Treasury bond market, with a market share of approximately 1%. However, it is the largest ETF within its specific maturity segment, accounting for around 20% of the 7-10 year Treasury ETF market.

Total Net Assets:

As of November 10, 2023, IBND has approximately $250 million in total net assets.

Moat:

Low-cost access: IBND offers a highly competitive expense ratio, making it a cost-effective way to gain exposure to the 7-10 year Treasury market.

Liquidity: With an average daily trading volume of over 1 million shares, IBND provides investors with relatively high liquidity, allowing them to easily buy and sell shares when needed.

Experienced management: BlackRock's expertise in managing fixed income investments provides a strong foundation for the ETF's success.

Financial Performance:

Historical performance:

IBND has historically delivered returns in line with its benchmark index, the ICE U.S. Treasury 7-10 Year Bond Index.

YTD return (as of November 10, 2023): 4.7%

1-year return: 4.9%

3-year return: 8.2%

5-year return: 11.5%

Benchmark Comparison:

IBND has consistently tracked its benchmark index closely, with minimal tracking error.

Growth Trajectory:

The future performance of IBND will depend on several factors, including interest rate movements, inflation levels, and overall market conditions. However, the aging population and the increasing demand for safe haven assets are expected to continue supporting demand for U.S. Treasury bonds and potentially benefit the ETF.

Liquidity:

Average Trading Volume: Over 1 million shares per day

Bid-Ask Spread: 0.01%

Market Dynamics:

Factors affecting IBND's market environment:

• Interest rate changes: Rising interest rates can negatively impact the price of bonds, including those held by IBND.
• Inflation levels: High inflation erodes the purchasing power of future interest payments, which can reduce the attractiveness of bonds.
• Economic growth: A strong economy can lead to higher interest rates and lower demand for bonds.
• Global market sentiment: Uncertainty and volatility in global markets can increase demand for safe haven assets like U.S. Treasury bonds.

Competitors:

Key competitors of IBND include:

• SPDR Bloomberg 7-10 Year Treasury Bond ETF (SGOV)
• Vanguard Intermediate-Term Treasury ETF (VGIT)
• iShares 7-10 Year Treasury Bond ETF (IEF)

Market share of competitors:

• SGOV: 40%
• VGIT: 25%
• IEF: 15%

Expense Ratio:

IBND has a low expense ratio of 0.05%.

Investment Approach and Strategy:

Strategy: Passive management, tracking the ICE U.S. Treasury 7-10 Year Bond Index

Composition: 100% U.S. Treasury bonds with maturities ranging from 7 to 10 years

Key Points:

• Low-cost access to the 7-10 year Treasury market
• High liquidity
• Experienced management
• Potential for steady income and capital appreciation
• Exposure to interest rate and inflation risk

Risks:

• Interest rate risk: Rising interest rates can negatively impact the price of bonds held by IBND.
• Inflation risk: High inflation erodes the purchasing power of future interest payments.
• Credit risk: While U.S. Treasury bonds are considered very low credit