ETF Spotlight: PowerShares 1-30 Laddered Treasury Portfolio

Aug.12.10 | About: PowerShares 1-30 (PLW)

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
  • “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 2-year notes fell to an all-time low

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Treasury Bond ETFs

Disclosure: None