Intermediate term treasuries represent the subset of government bonds between 3 and 10 years maturity. They are the most common bond holding in a portfolio.
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Target Market
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Notes Definitions
- +SCB — Total market fund that includes small caps (85% LCB + 15% SCB)
- +EM — Global fund that includes emerging markets (~90% DEV + 10% EM)
- -CAN — Excludes Canada (or other specified country normally in the index)
- Acc — Accumulating
- Dist — Distributing
Assume there are errors and always do your own research. No listings or links are sponsored. Because they track similar indices, all funds should have similar returns before fees.
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Alternatives
Other options when no intermediate term bond funds are available
Intermediate term treasury bonds are the most common bond option and usually have good availability. That said, the maturity ranges can sometimes be a little confusing. Look for unhedged government bonds with a weighted average maturity between 5 and 10 years. A fund that holds bonds between 1-30 years with a WAM of about 10 years will have very similar performance to one that only holds 10 year bonds.
- DEV + USA — If you want to own the full developed government bond market but a global fund is not available, try mixing USA ITT and Dev xUS ITT.
- Directly Owned Bonds — Bonds can be directly purchased from the government. For intermediate term treasuries, create a ladder by buying bonds with 10 years to maturity and rolling them over into new ones when they have just 3 years remaining. Allowing them to fully mature is also fine.
Definition
The Portfolio Charts intermediate term treasury bond data tracks the segment of the bond market with maturities between 3 years and 10 years. It also focuses exclusively on debt issued by countries, not companies. In the US they are called treasury bonds, but they may go by other names in different countries (gilts, bunds, etc.). While the data does not cover corporate bonds, the returns of treasury bonds are usually very similar investment-grade corporate bonds with a similarly high credit rating.
For bonds outside of your home market, there are two types of funds for the same types of bonds: currency hedged, and unhedged. Hedged bonds attempt to eliminate the impact of currency changes on bond yields (smoothing the ride) using active currency trading strategies. The data here exclusively tracks unhedged bonds. The extra exposure to currency differences means that international bonds will be more volatile than bonds in your home market.
Because the total bond market has a weighted average maturity in the same range, TBM funds are classified as intermediate bonds and have very similar performance. If you own a total government bond market fund that invests in the full range of maturities from 1-30 years, it is not necessary to use every bond option in the tools. Just allocate it to ITB.
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