Was just thinking of this one a bit. SHV is the iShares short term treasury ETF which consists of treasury holdings of less than 1 year duration. As such it is less likely to be impacted by interest rate hikes, but also has a low yield (around 1.13%, before its fee of .15%).
This appears to make little sense. Why would a retail investor hold an ETF with these characteristics right now? It is a very low risk ETF but there is still some risk, and there are "high interest" bank accounts with legit no risk yielding .50% more. One of the core tenets of investing is supposedly that risk and reward are correlated, however that does not seem to be the case here.
Whats going on here? Why is the risk/reward picture so skewed?
Submitted March 01, 2018 at 07:19AM by Monzothrowaway http://ift.tt/2HTKAst
