(IEI) iShares 3-7 Year Treasury - Ratings and Ratios

The iShares 3-7 Year Treasury Bond ETF (NASDAQ:IEI) is designed to track the performance of U.S. Treasury bonds with maturities between 3 and 7 years, providing investors with exposure to the intermediate segment of the government bond market.

To achieve its objective, the fund invests at least 80% of its assets in the component securities of the underlying index and at least 90% in U.S. Treasury securities, ensuring a high degree of correlation with the target market segment. This investment strategy allows the ETF to maintain a relatively low tracking error.

From a technical analysis perspective, the ETF is currently trading near its resistance level of 118.2, with support levels at 116.8, 116.4, and 115.9. The funds liquidity is substantial, with an AUM of $15.577 billion, indicating a robust market presence.

Key performance indicators (KPIs) for the IEI ETF include its yield, duration, and expense ratio. The yield, which is a critical metric for income-focused investors, is influenced by the prevailing interest rates and the credit quality of the underlying bonds. The duration, a measure of the funds sensitivity to interest rate changes, is expected to be around 4-5 years, given the maturity profile of the underlying bonds. The expense ratio, a key determinant of the funds net returns, is relatively low, at 0.15% per annum, making it an attractive option for cost-conscious investors.

In terms of risk management, the IEI ETF is subject to interest rate risk, as changes in yields can impact the funds NAV. However, the ETFs diversified portfolio and relatively short duration mitigate this risk to some extent. Investors should also be aware of the funds credit risk, although this is minimal given the ETFs investment in U.S. Treasury securities, which are considered to be virtually risk-free.