iShares Treasury Bond ETF Offers 3.84% Yield and 0.05% Fees
The iShares U.S. Treasury Bond ETF has an expense ratio of 0.05% and currently yields 3.84% on a 30-day SEC basis. It accounts for a 20% allocation in a five-ETF defensive portfolio, offers income largely exempt from state taxes, and benefits from classic flight-to-safety dynamics during market stress.
1. Portfolio Allocation
The iShares U.S. Treasury Bond ETF represents a 20% position in a defensive five-ETF strategy designed to reduce overall portfolio volatility. By pairing with non-cyclical equities and gold, this bond allocation seeks to provide balance when stocks and commodities diverge.
2. Expense Ratio and Yield
This ETF carries a minimal 0.05% expense ratio and offers a 3.84% 30-day SEC yield, with income largely exempt from state income taxes. Its low cost structure supports enhanced net returns for yield-focused investors.
3. Flight-to-Safety Characteristics
During economic downturns, investors often shift into U.S. Treasuries, driving yields down and bond prices up. Historical data from the 2008 financial crisis and the 2020 COVID sell-off demonstrate this ETF’s ability to act as a stabilizer in turbulent markets.