BondBloxx Bloomberg Ten YrTrgDurUSTrsETF’s management team is rated Average, but a solid investment process still helps this strategy retain its Morningstar Medalist Rating of Bronze. The portfolio maintains a cost advantage over competitors, priced within the second-cheapest fee quintile among peers.  

 The strategy's effective investment philosophy supports an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant underweight position in corporate bonds and AA rated bonds compared with category peers. The team managing the passive strategy earns the strategy an Average People Pillar rating. The strategy's parent organization is industry standard, albeit with some strong attributes like overall affordable fees and high portfolio management retention. This earns the firm an Average Parent Pillar rating.

Analyst Rating

BondBloxx Bloomberg Ten YrTrgDurUSTrsETF earns an Above Average Process Pillar rating. Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. The largest contributor to the rating is that this fund tracks an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. The firm's five-year retention rate of 100% also bolsters the process. Lastly, the process is limited by the size of its portfolio management team, only two portfolio managers.

The investment strategy as stated in the fund's prospectus is: 

The investment seeks to track the investment results of the Bloomberg US Treasury 10 Year Duration Index composed of U.S. Treasury securities with a duration between 6 and 14 years.  Under normal circumstances, the fund will invest at least 80% of its net assets (plus the amount of any borrowings for investment purposes) in a portfolio of U.S. Treasury securities that collectively have an average duration of approximately 10 years, either directly or indirectly (e.g., and through derivatives). The index is comprised of certain U.S. Treasury notes and bonds that are included in the Bloomberg US Treasury Index. It is non-diversified.  

 This strategy has a modest 3.7% 12-month yield, lower than its average peers' 4.0%. Typically, a lower yield comes with the benefit of less credit risk. The portfolio has a higher average surveyed credit quality of AAA, compared with the category average of AA, and it holds no non-investment-grade assets, similar to its peers' average. Strategies with less credit risk may help to provide a reliable ballast during periods of market stress. In terms of interest-rate risk, compared with others in the Long Government category, this fund maintains a lower average effective duration of 10.1 years compared to the category's 17.5 years. The shorter a strategy's duration, the less sensitive it is to shifts in interest rates. This fund, with a 10.1-year duration, is expected to gain 10.1% of its net asset value if interest rates drop by 1 percentage point, and vice versa.

Above Average

Process

BondBloxx Investment Management LLC’s team receives An Average People Pillar rating. The main contributor to the rating is the firm's five-year retention rate of 100%. A low expense ratio also contributes to the rating, with fees ranking in its category's second-cheapest fifth. A higher expense ratio reduces net returns, so low costs give this team an advantage. Lastly, the rating is limited by the number of months that the management team has been running this vehicle together. Since this is a newly incepted product, more time is needed to monitor the team's capability at executing the strategy.

Average

People

Since its inception only two years ago, BondBloxx Investment Management LLC has demonstrated that it can be trusted as much as the next asset manager. As a result, it has an Average Parent Pillar rating. BondBloxx Investment Management LLC currently oversees 25 vehicles, with a total of $2.66 billion under management and a bench of 13 fund managers. BondBloxx Investment Management LLC's management team is composed of mostly veteran managers, averaging 20 years of industry experience. A firm's ability to retain its talent is a crucial indicator of its culture. This has been a strength of BondBloxx Investment Management LLC, which has had lower-than-average manager turnover. 

 BondBloxx Investment Management LLC deserves plaudits for its commitment to low fees for its open-end and exchange-traded funds, which showcases its willingness to prioritize investors. The firm's average net expense ratio across all funds is in the cheapest quintile of firms.  

 To keep an Average rating, BondBloxx Investment Management LLC will be expected to maintain a consistent track record of positive investor experience.

Parent

BondBloxx Bloomberg Ten Year Target Duration US Treasury ETF

XTEN is passively managed to invest in a portfolio of US Treasury securities with a target duration of ten years.

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Our monthly market valuation updates have long had the same conclusion: US stock indexes are significantly overvalued, which suggests cautious expectations for investment returns. On August 4, 2020, the 10-year Treasury yield hit its all-time low of 0.52%.

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Our monthly market valuation updates have long had the same conclusion: US stock indexes are significantly overvalued, which suggests cautious expectations for investment returns. On August 4, 2020, the 10-year Treasury yield hit its all-time low of 0.52%.

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Our monthly market valuation updates have long had the same conclusion: US stock indexes are significantly overvalued, which suggests cautious expectations for investment returns. On August 4, 2020, the 10-year Treasury yield hit its all-time low of 0.52%.

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With the end of the year approaching, it could be a good time to consider tax-loss harvesting to capture potential tax benefits. And given the performance in long-dated Treasuries over the last two years, U.S. Treasury ETFs are an easy, low-cost way of maintaining Treasury exposure while realizing losses for tax purposes.

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