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For investors seeking momentum, iShares Short Treasury Bond ETF (ASX:SHV) is probably on the radar now. The product just hit a 52-week high and is up about 0.9% from its 52-week low price of $110.03/share.
But are more gains in store for this product? Let’s take a quick look at the product and the near-term outlook on it to get a better idea on where it might be headed:
SHV in Focus
The underlying ICE (NYSE:ICE) U.S. Treasury Short Bond Index intends to assess U.S. Treasury issued debt. Only U.S. dollar denominated, fixed rate securities with minimum term to maturity greater than one month and less than or equal to one year are included. The product charges 15 bps in fees (see all Government Bond ETFs here).
Why the Move?
Safe-haven trade and an emergency Fed rate cut boosted the buying of U.S. treasuries which dragged down bond yields. Investors mainly flocked to short-term U.S. treasuries. These bonds have lower default risks than the longer-term bonds. Also, the Fed announced on Mar 12 that it’s injecting up to $2 trillion into short-term lending markets to ensure seamless functioning in the Treasury bond market.
More Gains Ahead?
The product has a Zacks Rank #2 (Buy). It has a positive weighted alpha of 0.50, which gives cues of further rally.
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