1-3 Year Treasury Bond (SHY): How to Buy

The iShares 1-3 Year Treasury Bond ETF (SHY 0.15%) is an exchange-traded fund (ETF) that is part of the iShares Division of BlackRock (BLK -2.46%). iShares offers a variety of ETFs, including portfolio ETFs, active ETFs, and high-income equity ETFs.

The iShares 1-3 Year Treasury Bond ETF had more than $23 billion in assets under management (AUM) as of early 2025. Here's what investors need to know before buying this ETF and how to invest in ETFs for beginners.

What is it?

What is the iShares 1-3 Year Treasury Bond ETF?

The iShares 1-3 Year Treasury Bond ETF is designed to track the investment results of the ICE US Treasury 1-3 Year Bond Index, an index composed of U.S. Treasury bonds with remaining maturities between one and three years. Investors in the ETF will receive targeted access to this specific segment of the U.S. Treasury market, with broad exposure to short-term U.S. Treasury bonds.

How to invest

How to buy the iShares 1-3 Year Treasury Bond ETF

If you want to buy shares of the iShares 1-3 Year Treasury Bond ETF, you can do so with a few simple steps. Here's your step-by-step guide.

1. Open your brokerage app: If you don't already have an account, you'll need to open one to buy shares of this ETF. It's easy to open an account. It takes five to 10 minutes on most brokers' websites. For any broker you're considering, take time to compare the costs associated with trading, including commissions, account maintenance fees, and any other charges to competitors. Be sure to assess the quality and availability of customer support and check the range of investment products available.
2. Search for the ETF: Once you have opened and funded your brokerage account, enter the ticker SHY or iShares 1-3 Year Treasury Bond ETF name into the search bar to bring up the ETF's trading page. Make sure you have fully researched the investment and have a strong thesis to buy and keep it in your portfolio for the long run.
3. Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this ETF. A benefit of investing in an ETF like this is that you can gain instant exposure to a wide range of short-term U.S. Treasury Bonds with a single purchase of the ETF's shares. Rather than buying individual bonds, you can be instantly diversified as soon as you hit the buy button for this ETF.
4. Select order type: On the order page, enter the number of shares or the dollar amount you want to invest in the iShares 1-3 Year Treasury Bond ETF. Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay. It's usually best to place a market order so your purchase executes right away.
5. Submit your order: Once you've opened and funded your brokerage account, set your investing budget, and are ready to buy shares of the iShares 1-3 Year Treasury Bond ETF, the process is straightforward. Confirm the details and submit your buy order.
6. Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly. Many brokerages allow orders to be placed outside of market hours. Assuming you've placed a market order rather than a limit order, you should see shares of the iShares 1-3 Year Treasury Bond ETF added right away.

ETF holdings

Holdings of the iShares 1-3 Year Treasury Bond ETF

The iShares 1-3 Year Treasury Bond ETF tracks the investment results of the ICE US Treasury 1-3 Year Bond Index, which is composed of U.S. Treasury bonds with remaining maturities between one and three years. The ETF held 127 bonds as of early 2025.

The weighted average coupon of the underlying bonds in the fund is 2.82, with an effective duration of 1.82 years. The fund is weighted by 99.83% in U.S. Treasury bonds, with just 0.17% of the fund held in cash and/or derivatives.

The top 10 holdings of U.S. Treasury notes in the ETF as of early 2025 were:

Should I invest?

Should I invest in the iShares 1-3 Year Treasury Bond ETF?

Investing and deciding where to put your cash to work is a personal decision. You want to ensure your portfolio aligns with your investing goals, personal values, and risk tolerance. With that in mind, there are numerous reasons you might determine that the iShares 1-3 Year Treasury Bond ETF makes sense for your portfolio.

If you want to invest in a sector ETF focused on a broad range of short-term U.S. Treasury bonds, a position in this ETF provides instant diversification and exposure to a variety of these bonds. Likewise, if you’re looking for a lower-risk, income-focused investment and you want a monthly income stream, the ETF could also be worth a look.

Short-term Treasury bonds are debt securities that mature in a few months to a few years and are issued by the U.S. government. When the bond matures, the U.S. government repays the principal and any interest earned. Investors are paid interest payments, also known as coupon payments, during the life of the bond.

Short-term bonds are considered low-risk investments because they are backed by the U.S. government and are a popular choice for investors who want to preserve their principal investment while earning some interest.

These bonds are also less affected by interest rate fluctuations because they mature quickly, making them a more stable choice than long-term bonds.

If you prefer to handpick the bonds you invest or want less exposure to U.S. government bonds, you might prefer to take a small position in this ETF or consider a different fund.

Dividends

Does the iShares 1-3 Year Treasury Bond ETF pay a dividend?

Yes, the iShares 1-3 Year Treasury Bond ETF pays a dividend that is distributed on a monthly basis. It yielded around 4% as of early 2025.

Expense ratio

What is the iShares 1-3 Year Treasury Bond ETF's expense ratio?

The iShares 1-3 Year Treasury Bond ETF has an expense ratio of 0.15%, so a $10,000 investment in the ETF would cost about $15 in annual fees.

Historical performance

Historical performance of the iShares 1-3 Year Treasury Bond ETF

The iShares 1-3 Year Treasury Bond ETF is designed to track the performance of the ICE US Treasury 1-3 Year Bond Index. Let's take a look at how the ETF has delivered on that objective through the years.

Related investing topics

The bottom line on the iShares 1-3 Year Treasury Bond ETF

This iShares 1-3 Year Treasury Bond EF can enable investors to gain broad exposure to numerous high-quality short-term bonds that provide consistent monthly income. If you’re interested in investing in a lower-risk, stable investment, and short-term bonds, this ETF could be a solid choice for a buy-and-hold portfolio.

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