iShares 0-1 Year Treasury ETF Draws Inflows with 3.6% Yield as Money Funds Hit $7.8T
Assets in money market funds reached $7.8 trillion as of the week ended Feb 25, up 11.8% year-over-year as investors seek liquid yields. The iShares 0-1 Year Treasury ETF offers around 3.60% on a three-month bill equivalent, drawing inflows on sustained high short-term rates.
1. Fund Performance and Yield
The iShares 0-1 Year Treasury ETF currently yields approximately 3.60% on three-month bill equivalents and has provided stable returns with minimal duration risk. Investors benefit from daily liquidity while earning returns above traditional deposit rates.
2. Asset Flows and Market Trends
Money market fund assets climbed to $7.8 trillion as of Feb 25, reflecting an 11.8% rise over the past year and sustained inflows into ultra-short-duration products. Both retail and institutional investors have shifted cash into SHV and similar ETFs to capitalize on elevated short-term yields.
3. Rate Outlook and Risks
The Federal Reserve’s policy rate remains elevated, but market pricing suggests potential cuts later in 2026, which could compress yields on SHV and comparable money market products. If rates are reduced, investors may see lower returns and could reallocate toward longer-duration securities.