Investors looking for alternatives to traditional cash instruments can pick from a number of exchange traded funds featuring high-grade, low duration U.S. government debt. An increasingly popular ETF in this corner of the bond space is also fairly new.
The Goldman Sachs Treasury Access 0-1 Year ETF (NYSEArca:GBIL) debuted in September and has recently a big influx of investor assets.
GBIL looks to reflect the performance of the Citi US Treasury 0-1 Year Composite Select Index, which is comprised of U.S. Treasury Obligations with a maximum remaining maturity of 12 months. U.S. Treasury obligations refer to securities issued by the U.S. Treasury where payment of principal and interest is backed by the U.S. government. The fund h as an effective duration of 0.40 year.
“To be fair, GBIL debuted in September, so it is around 10 months old. Still, a 10-month-old ETF with assets under management of over $635 million is noteworthy. GBIL has swelled in size thanks to a recent spate of inflows,” reports Investopedia.
GBIL holds 13 Treasury securities and has an effective duration of just 0.37 years. Duration measures a bond’s sensitivity to interest rate changes.