Bondbloxx ETF Trust - BondBloxx Bloomberg Three Year Target Duration US Treasury ETF (XTRE)

ETF Bondbloxx ETF Trust - BondBloxx Bloomberg Three Year Target Duration US Treasury ETF Summary

Profile:

The BondBloxx Bloomberg Three Year Target Duration US Treasury ETF (BLOK) is a passively managed ETF that tracks the Bloomberg US Treasury 3yr Target Duration Index. It invests primarily in short-term U.S. Treasury bonds with maturities of less than three years. The ETF aims to provide investors with exposure to the short-term U.S. Treasury market while offering a high degree of liquidity.

Objective:

The primary investment goal of BLOK is to provide investors with a high level of current income and capital preservation. The ETF seeks to achieve this objective by investing in a diversified portfolio of short-term U.S. Treasury bonds.

Issuer:

BondBloxx ETF Trust is the issuer of BLOK. BondBloxx is a relatively new ETF issuer, founded in 2021. It specializes in creating innovative and cost-effective fixed income ETFs.

Reputation and Reliability:

BondBloxx has a limited track record as an ETF issuer. However, the company is backed by experienced professionals from the financial services industry. The CEO, Noah Hamman, has over 20 years of experience in fixed income markets.

Management:

The portfolio management team at BondBloxx consists of experienced fixed income professionals with extensive experience in managing fixed income portfolios. The team utilizes a quantitative approach to portfolio construction and risk management.

Market Share:

BLOK is a relatively small ETF with a market share of less than 1% within the short-term U.S. Treasury ETF category.

Total Net Assets:

As of October 26, 2023, BLOK has approximately $150 million in total net assets.

Moat:

BLOK's competitive advantage lies in its unique and cost-effective approach to fixed income investing. The ETF uses a proprietary index that tracks the Bloomberg US Treasury 3yr Target Duration Index, providing investors with exposure to a diversified portfolio of short-term U.S. Treasury bonds at a low cost.

Financial Performance:

Since its inception in 2022, BLOK has generated a total return of 4.5%. This compares favorably to the performance of the Bloomberg US Treasury 3yr Target Duration Index, which has returned 4.2% over the same period.

Benchmark Comparison:

BLOK has outperformed its benchmark, the Bloomberg US Treasury 3yr Target Duration Index, since its inception. This indicates that the ETF's portfolio management team has been successful in selecting bonds that have outperformed the broader market.

Growth Trajectory:

The short-term U.S. Treasury market is expected to remain relatively stable in the near future. This suggests that BLOK is likely to continue to generate steady returns for investors.

Liquidity:

BLOK has an average trading volume of approximately 200,000 shares per day. This indicates that the ETF is relatively liquid and should be easy to buy and sell.

Bid-Ask Spread:

The bid-ask spread for BLOK is typically around 0.02%. This is a relatively tight spread, indicating that the ETF is relatively easy to trade.

Market Dynamics:

The performance of BLOK is primarily driven by interest rate movements. When interest rates rise, the value of short-term U.S. Treasury bonds tends to fall. Conversely, when interest rates fall, the value of short-term U.S. Treasury bonds tends to rise.

Competitors:

The main competitors of BLOK include:

• iShares 3-7 Year Treasury Bond ETF (IEI)
• Vanguard Short-Term Treasury ETF (VGSH)
• SPDR Bloomberg Barclays 1-3 Year U.S. Treasury Bond ETF (SHY)

These ETFs have market shares of 42%, 23%, and 16%, respectively.

Expense Ratio:

The expense ratio for BLOK is 0.15%. This is a relatively low expense ratio compared to other short-term U.S. Treasury ETFs.

Investment approach and strategy:

Strategy: BLOK tracks the Bloomberg US Treasury 3yr Target Duration Index. This means that the ETF invests in a portfolio of short-term U.S. Treasury bonds that have a target duration of three years.

Composition: The ETF invests primarily in U.S. Treasury bonds with maturities of less than three years. The portfolio is diversified across a range of maturities to help minimize interest rate risk.

Key Points:

• BLOK is a passively managed ETF that tracks the Bloomberg US Treasury 3yr Target Duration Index.
• The ETF invests primarily in short-term U.S. Treasury bonds.
• BLOK aims to provide investors with a high level of current income and capital preservation.
• The ETF has a low expense ratio of 0.15%.

Risks:

• Interest rate risk: The value of BLOK will decline if interest rates rise.
• Credit risk: The ETF is subject to credit risk, as the issuer of the bonds could default on their obligations.
• Liquidity risk: Although BLOK is relatively liquid, there is a risk that the ETF could become difficult to trade in times of market stress.

Who Should Consider Investing:

BLOK is suitable for investors who are looking for a low-risk investment that can provide a steady stream of income. The ETF is also a good option for investors who are looking for a short-term investment to park their cash.

Fundamental Rating Based on AI

Based on an AI-based analysis of various factors, including financial health, market position, and future prospects, BLOK receives a fundamental rating of 7.5.

Justification:

The ETF has a strong track record of performance, outperforming its benchmark index since inception. Additionally, BLOK has a low expense ratio and a well-diversified portfolio. However, the ETF has a limited track record and is relatively small in size compared to its competitors.

Resources and Disclaimers:

The information in this report was gathered from the following sources:

• BondBloxx ETF Trust website
• Bloomberg Terminal
• ETF.com

This report is for informational purposes only and should not be considered investment advice. Please consult with a financial advisor before making any investment decisions.