iShares Adds Ultra Short Bond ETF

Today, iShares has rolled out an ETF that covers the Treasuries market, focusing on issues with less than three months left on their maturity. The iShares 0-3 Month Treasury Bond ETF (SGOV) tracks the ICE 0-3 Month US Treasury Securities Index, which had 36 components as of May 1, according to its prospectus.

The fund comes with a post-waiver expense ratio of 0.07% and lists on the NYSE Arca.

SGOV’s expense ratio renders it the cheapest ETF in its category. The biggest ETF falling under the ultra-short Treasury category on ETF.com is another iShares ETF, the $25 billion iShares Short Treasury Bond ETF (SHV), which charges 0.15%. It covers Treasuries with a year or less to maturity, with SGOV clearly taking a much shorter-term angle on the space.

“We’ve seen more than$26 billion in flows across the suite of iShares short-term bond ETFs year to date. The addition of SGOV to our U.S. Treasury and shorter maturity suites offers precise exposure for  increased stability, liquidity and cash management,” said Steven Laipply, U.S. head of iShares Fixed Income ETFs for BlackRock, said.

With so much volatility in the securities markets, investors are turning to fixed income, and iShares notes that bond ETFs saw record trading volume in the first quarter.

WisdomTree Closes 10 ETFs

Yesterday was the last day of trading for 10 WisdomTree ETFs, including the following:

• WisdomTree Negative Duration U.S. Aggregate Bond Fund (AGND)
• WisdomTree Asia Pacific ex-Japan Fund (AXJL)
• WisdomTree Dynamic Long/Short U.S. Equity Fund (DYLS)
• WisdomTree Emerging Markets Consumer Growth Fund (EMCG)
• WisdomTree Europe Multifactor Fund (EUMF)
• WisdomTree Yield Enhanced Global Aggregate Bond Fund (GLBY)
• WisdomTree Middle East Dividend Fund (GULF)
• WisdomTree Negative Duration High Yield Bond Fund (HYND)
• WisdomTree Japan Multifactor Fund (JNMF)
• WisdomTree ICBCCS S&P China 500 Fund (WCHN)

The shutdowns were announced back in April and bring the total number of closures so far this year to 119, a number  that is unprecedented this early in a calendar year. Just five months in to 2020, there already have been as many closures as are normally seen in any given year.

The move by WisdomTree isn’t exactly shocking. The firm has been hit harder than many of its peers by the market crash, with its total assets under management currently at roughly $30 billion, down from $40.6 billion at the start of the year. It makes sense that WisdomTree would weed out some of its less promising ETFs.

However, the year’s closures are also the logical result of an unprecedented year of market swings in which the S&P 500 plunged 30%  from its all-time peak in a matter of weeks. With more than 650 ETFs (out of a total of more than 2,300) trading on the U.S.  market that have less than $20 million in assets apiece, there is clearly room for some consolidation.

Contact Heather Bell at [email protected]