Is There an Investment Opportunity Building in the SHY ETF?

Bonds, Markets, Strategies

Lately, I’ve really been liking the iShares 1-3 Year Treasury Bond ETF (SHY).

The SHY ETF tracks and represents the performance of the U.S. Treasury bonds with remaining maturities between one and three years. It lets investors target a part of the short-term U.S. Treasury market.

Bond prices have been going lower for some time since the Fed started hiking rates in March 2022. This means the yield of the SHY ETF has gotten higher.

Right now, it’s yielding at around 5% – which is more or less congruent to the shorter end of the yield curve. 

If a person were to park some money into this ETF, it could be interesting

I don’t believe yields are going much higher from where they are now. That means there shouldn’t be a huge risk of the bond prices – SHY ETF – going a heck of a lot lower, for the time being, because it looks like the economy is slowing down. 

That brings me to the second reason why I love this ETF so much…

In today’s 2-minute video, I talk about the move I expect to see in the ETF once the economy completely slows down, what it will look like if the Fed cuts rates in the future and where the investment opportunity lies. 

I release these weekly tips every Thursday for free, so stay tuned and stay subscribed here. 

Serge Berger

Editor of 11-Day Trader

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