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Treasury ETF (IEI) Hits New 52-Week High

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For investors seeking momentum, iShares 3-7 Year Treasury Bond ETF IEI is probably on radar now. The fund just hit a 52-week high, and is up nearly 4% from its 52-week low price of $118.15/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

IEI in Focus    

IEI targets the intermediate end of the yield curve, holding 64 bonds in its basket. It has a weighted average maturity of 4.80 years and an effective duration of 4.50 years. It is one of the most popular and liquid ETFs in the Treasury space with AUM of $7.3 billion and average daily volume of nearly 791,00 shares. The product charges 15 bps in expense ratio (see: all the Government Bond ETFs here).

Why the Move?

The Treasury corner of the fixed income world has been an area to watch lately given the Fed’s more-than-expected dovish comments and bouts of uncertainty related to trade deal and Brexit. Fed Chair Powell said that there will be no further interest rate hikes this year due to signs of softness in the U.S. economy.

More Gains Ahead?

Currently, IEI has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. Therefore, it is hard to get a handle on its future returns one way or the other. However, it seems that the ETF might continue its outperformance at least in the near term given a positive weighted alpha of 2.50% and low 20-day volatility of 2.79%. As a result, there is definitely still some promise for risk-aggressive investors, who want to ride on this surging ETF.

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iShares 3-7 Year Treasury Bond ETF (IEI): ETF Research Reports
 
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