I have been intrigued by this particular ETF for a while now. I don't see much else like it. Its duration would indicate it is an intermediate treasury bond fund but under the hood it is more than that.
From what I can tell, it holds bonds based on their market cap from 1 year to 30 years.
I feel like this would prevent you from getting over your skis in the long maturities if it is being artificially limited. I also believe it gets you the most coupon income if the rates are higher where maturities have more issues.
Most of the maturities are currently under 7 years with only 15% of the maturities being 20+ years.
I found FUTBX Fidelity® SAI U.S. Treasury Bond Index Fund that appears similar but it required Fidelity wealth services so it would be a lot more expensive with that.
Here is some more information from the underlying index GOVT uses:
https://www.theice.com/publicdocs/data/ ... s_Core.pdf
It also appears to exclude bonds held by the federal reserve from the market cap so you would somewhat avoid their manipulation which I believe some have been concerned with here.The Index is market value weighted, and is designed to include U.S. dollar
denominated, fixed rate securities with minimum term to maturity greater than one year and less
than or equal to thirty years.
I am thinking of doing a 3x33 portfolio using this fund, total stock fund and a gold fund in IRAs. I thought it also might be helpful for people currently skeptical of the long term treasury bonds if you used it in 4x25.U.S. Treasuries included in the Federal Reserve System Open Market Account
(SOMA) will be deducted from the bond amount outstanding.
It is a little eye opening to see how little market cap the long term treasuries make up. It does make me feel like the interest rates are a little bit suppressed on the long end currently.
What I would like to find if anyone knows of one, is a chart that shows the market cap of each bond maturity outstanding to see how it compares to this fund.