IBTR holds a ladder of U.S. Treasury bonds that all mature in December 2036, functioning like a single bond you can trade on an exchange. It provides a known maturity date with the liquidity of an ETF, letting investors lock in today's Treasury yields for exactly 10 years.
How It Works
The fund buys Treasuries maturing between July and December 2036, then holds them to maturity. As bonds approach their maturity date, the ETF's duration naturally declines from about 10 years today to near zero in 2036. At maturity, the fund liquidates and returns cash to shareholders, eliminating reinvestment risk. The portfolio stays static — no rebalancing or rolling of maturities like traditional bond funds.
Key Features
- Defined end date eliminates duration guesswork — you know exactly when you get your money back
- Zero expense ratio makes it cheaper than buying individual Treasuries through most brokers
- Built-in diversification across multiple Treasury issues reduces liquidity risk vs owning a single bond
Risks
- Rising rates before 2036 will create paper losses — a 1% rate rise means roughly 10% price decline today
- Early sale locks in losses if rates have risen, just like selling an individual bond before maturity
- No ability to extend duration if rates fall — you're locked into 2036 maturity regardless of market conditions
Who Should Own This
Perfect for investors with a specific 2036 liability — think college tuition or a planned retirement expense. Also works for those wanting Treasury exposure without the duration uncertainty of traditional bond funds. The zero expense ratio and defined maturity make it a cleaner alternative to building your own Treasury ladder, especially for accounts under $500,000.