ETF Spotlight on PowerShares 1-30 Laddered Treasury Portfolio (NYSEArca: PLW), part of a weekly series.
Assets: $86.8 million
Objective: Tracks the Ryan/Mergent 1-3 Year Treasury Laddered Index
Holdings: PLW holds 26 Treasury bonds across a range of maturities
What You Should Know
- Long-term bonds make up 77.9% of the fund; medium-term is 12.9%; and short-term is 6.2%
- The longest term funds have the heaviest weighting, while the ultra-short term bonds have the smallest weightings [Treasury Bond ETFs Hang Onto Appeal.]
- “Laddered” means that the bonds in the fund are Treasury bonds with fixed coupons, scheduled to mature in a proportional, annual sequential structure
- The yield on this fund is better than yields you’ll find on most Treasuries: 3.49%
- The advantage of bond ladders is that they provide more consistent returns, they reduce risk and better liquidity, because the securities expire at a consistent rate
The Latest News
- Continued worries about a global economic recovery have sent investors pouring into Treasuries, which has had an impact on yields
- Yields on the 10-year Treasury got even more paltry, sinking to the lowest level in 16 months: 2.713%
- Traders believe yields could go even lower, to 2.5%; this would be the lowest level in 17 months
- On Wednesday, yields on the 2-year notes fell to an all-time low
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.