Selecting asset class components – US Treasury Bonds

This post will cover how I constructed the US Treasury Bond asset class. This was quite simple, as I used 3 ETFs, with equal dollar amounts, to gain exposure to the short, medium, and long portions of the yield curve.

SHY: “The iShares Barclays 1-3 Year Treasury Bond Fund seeks to approximate the total rate of return that correspond generally to the price and yield performance, before fees and expenses, of the short-term sector of the United States Treasury market as defined by the Barclays Capital U.S. 1-3 Year Treasury Bond Index.”

IEF: “The iShares Barclays 7-10 Year Treasury Bond Fund seeks to approximate the total rate of return of the intermediate-term sector of the United States Treasury market as defined by the Barclays Capital U.S. 7-10 Year Treasury Bond Index.”

TLT: “The iShares Barclays 20+ Year Treasury Bond Fund seeks to approximate the total rate of return of the long-term sector of the United States Treasury market as defined by the Barclays Capital U.S. 20+ Year Treasury Bond Index.”

A graph of the current yield curve can be found here.

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