For low cost US Treasury ETFs, you'll be spoiled for choice

This is a summary of the Invesco US Treasury Bond UCITS ETFs (exchange-traded funds), and is for discussion purposes only. Please consult the relevant Key Investor Information Document and prospectus and note the investment risks and important information shown below.

Lowest cost

Ongoing charges of 0.06% p.a. are lowest in Europe

Diversification benefits

US Treasuries could provide a cushion for multi-asset portfolios in times of turbulence

Broad choice

Choice of maturities

We offer choice of maturity ranges and broad exposure

Investing in high quality bonds, such as US Treasuries (bonds issued by the US government), can be useful if you’re looking to diversify your portfolio, as they tend to be less volatile than equities and most other types of bonds. Although the value of US Treasury Bonds is not guaranteed and can still fall, they have historically provided a cushion when equity markets have been turbulent or the economic environment uncertain.

If you are considering an investment in US Treasury Bonds, make sure you don’t pay too much.

Our new range of US Treasury Bond UCITS ETFs have the lowest ongoing charges in Europe. We offer three ETFs with targeted exposure to different ranges of maturities and one ETF that provides broad exposure across the full maturity spectrum. 

Lowest costs in Europe

Source: Morningstar, universe of European-domiciled ETFs tracking the same index, as at 14 January 2019. Fee range excludes Invesco products. 

Yields among the highest of G7 countries’ government bonds1

Yields on US Treasuries have doubled from their 2016 lows and are currently among the highest government bond yields of G7 countries. US Treasuries may offer a solution if you want to potentially mitigate some of the volatility during these uncertain times or you think the US Federal Reserve may slow down raising interest rates. In its December 2018 statement , the US Federal Reserve said it is now projecting just two interest rate hikes during 2019, down from its previous forecast of three increases. 

In general, you would expect bond prices to go up when interest rates fall, and to go down when interest rates rise. However, they won’t all move exactly the same. The “duration” of a bond, or basket of bonds, is the sensitivity of its price to a change in interest rates. Let’s say, for example, the US Federal Reserve raises interest rates today. That should cause bond prices to fall, but you would expect the price of a bond with higher duration (e.g. a bond with 10 years to maturity) to fall more than an otherwise similar bond with lower duration (e.g. a bond with 3 years to maturity). 

The choice is yours

We offer a choice of targeted maturities and broader exposure across all maturities. Each ETF aims to deliver the performance of the relevant Bloomberg Barclays US Treasury Index, net of fees. The indices measure US dollar-denominated, fixed-rate, nominal debt issued by the US Treasury. Treasury bills (bonds issued with less than one year to maturity) are excluded by the maturity constraint, while STRIPS (when a financial institution removes all the regular coupon payments from the bond, enabling the firm to sell those coupon payments on their own and sell the rest of the bond, i.e. the principal, separately) are excluded to avoid double-counting.  

 

 

Invesco US Treasury Bond 1-3 Year UCITS ETF

Invesco US Treasury Bond 3-7 Year UCITS ETF

Invesco US Treasury Bond 7-10 Year UCITS ETF

Invesco US Treasury Bond UCITS ETF

Bloomberg ticker

TRE3

TRE7

TREX

TRES

Trading currency

USD and GBP3

Dividend frequency

Quarterly

Quarterly

Quarterly

Quarterly

Ongoing charge

0.06%

0.06%

0.06%

0.06%

Benchmark

Bloomberg Barclays U.S. Treasury 1-3 Year Total Return Index USD Unhedged

Bloomberg Barclays U.S. Treasury 3-7 Year Total Return Index USD Unhedged

Bloomberg Barclays U.S. Treasury 7-10 Year Total Return Index USD Unhedged

Bloomberg Barclays U.S. Treasury Total Return Index USD Unhedged

Number of index constituents

99

93

20

261

Yield to maturity*

2.52%

2.52%

2.66%

2.61%

Option-adjusted duration (yrs)*

1.86

4.47

7.58

6.07

Sourcce: Invesco, Bloomberg, 31 December 2018. *Index data. “Yield-to-maturity” is the annual yield percentage based on the current market price of the bond, and assuming the bond will be held to maturity. “Option-adjusted duration” is the sensitivity of the bond’s price to a change in interest rates, considering the possible effect on the expected life of the bond if the bond is called early by the issuer, i.e. the bond is paid off before the maturity date. 

Find out more

Invesco US Treasury Bond 1-3 Year UCITS ETF
Invesco US Treasury Bond 3-7 Year UCITS ETF
Invesco US Treasury Bond 7-10 Year UCITS ETF
Invesco US Treasury Bond 7-10 Year UCITS ETF GBP Hdg
Invesco US Treasury Bond UCITS ETF

The newest additions to our Portfolio Funds range

We already have some of the lowest cost exposures to many core equity and commodity benchmarks and are now building out our core fixed income product range. The new Invesco US Treasury Bond UCITS ETFs follow recent launches of low cost, efficient exposures to corporate bonds and floating rate notes.

Find out more about our Portfolio Funds

 

Investment Risks

The value of investments, and any income from them, will fluctuate. This may partly be the result of changes in exchange rates. Investors may not get back the full amount invested

Debt instruments are exposed to credit risk which relates to the ability of the borrower to repay the interest and capital on the redemption date.

Changes in interest rates will result in fluctuations in the value of the fund.

Important Information

Your capital is at risk. You may not get back the amount you invested.

This information is marketing material and is not intended as investment advice or as a recommendation to invest in any particular asset class, security or strategy. The information provided is for illustrative purposes only, and it should not be relied upon as investment advice or as a recommendation to buy or sell securities. Investors should seek independent professional advice prior to investing.

The distribution and the offering of the products in certain jurisdictions may be restricted by law. This document does not constitute an offer or solicitation by anyone in any jurisdiction in which such an offer is not authorised or to any person to whom it is unlawful to make such an offer or solicitation. This document is not for distribution to, or for the attention of, US or Canadian persons.

Any investment in the products should be made on the basis of the relevant Prospectus, Key Investor Information Document or Key Information Document (the “offering documents”), and it should include a consideration of the investment objective, risks, charges and expenses. The offering documents as well as further information on the products (including information on their portfolio composition) are available at etf.invesco.com, or from your financial adviser or broker.

The products described on etf.invesco.com are not suitable for everyone. Investors’ capital is at risk and they may get back less than they invested. Past performance is not a guide to future performance, and investors should not deal in these products unless they understand their nature and the extent of their exposure to risk. The value of these products can go down as well as up and can be subject to volatility due to factors such as price changes in the underlying instrument and interest rates. Tax treatment depends on the individual circumstances of each investor and potential investor, and may be subject to change. Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. 

UCITS ETF’s units / shares purchased on the secondary market cannot usually be sold directly back to UCITS ETF. Investors must buy and sell units / shares on a secondary market with the assistance of an intermediary (e.g. a stockbroker) and may incur fees for doing so. In addition, investors may pay more than the current net asset value when buying units / shares and may receive less than the current net asset value when selling them.

BLOOMBERG® is a trademark and service mark of Bloomberg Finance L.P. and its affiliates (collectively “Bloomberg”). BARCLAYS® is a trademark and service mark of Barclays Bank Plc (collectively with its affiliates, “Barclays”), used under license. Bloomberg or Bloomberg’s licensors, including Barclays, own all proprietary rights in the Bloomberg Barclays Indices. Neither Bloomberg nor Barclays is affiliated with Invesco, and neither approves, endorses, reviews or recommends the Fund. Neither Bloomberg nor Barclays guarantees the timeliness, accurateness or completeness of any data or information relating to the Index, and neither shall be liable in any way to Invesco, investors in the Fund or other third parties in respect of the use or accuracy of the Index or any data included therein.

This has been communicated by Invesco, Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire, RG9 1HH authorised and regulated by the Financial Conduct Authority, and Invesco Asset Management Limited, Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire, RG9 1HH, United Kingdom. Authorised and regulated by the Financial Conduct Authority.

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