iShares 1-3 Year Treasury Bond ETF (SHY): Complete Beginner's Guide
iShares 1-3 Year Treasury Bond ETF (SHY) is a short-term treasury ETF from BlackRock with an expense ratio of 0.15% and $25.0B in assets under management. Our Beginner Suitability Score: 9/10 (Great for Beginners). 5-year annualized return: 1.80%.
Last updated: April 2026
BlackRock • Short-Term Treasury
Expense Ratio
0.15%
AUM
$25.0B
Dividend Yield
3.50%
Inception
2002
Beginner Score
9/10
What is iShares 1-3 Year Treasury Bond ETF?
SHY tracks the ICE U.S. Treasury 1-3 Year Bond Index, focusing exclusively on short-maturity U.S. Treasury bonds that mature within one to three years. Short-duration Treasuries have minimal interest rate risk, making SHY one of the most stable bond ETFs available. It serves as an excellent cash alternative or parking place for money you might need in the near term.
SHY is managed by BlackRock and has been available since 2002. With $25.0B in assets under management, it's a well-established fund with strong institutional backing. The fund charges an expense ratio of 0.15%, which means for every $10,000 you invest, you pay approximately $15 per year in management fees.
SHY at a Glance — Key Metrics
| Expense Ratio | 0.15% |
| Total Holdings | 85 |
| P/E Ratio | N/A |
| Beta | 0.03 |
| Dividend Yield | 3.50% |
| AUM | $25.0B |
| Inception Year | 2002 |
| Issuer | BlackRock |
Top 10 Holdings in SHY
SHY holds 85 different securities. Here are the largest positions that make up the core of this fund:
| # | Company | Ticker | Weight |
|---|---|---|---|
| 1 | US Treasury 4.875% 10/31/2026 | T 4.875 2026 | 6.00% |
| 2 | US Treasury 4.625% 06/30/2027 | T 4.625 2027 | 5.50% |
| 3 | US Treasury 4.5% 11/30/2026 | T 4.5 2026 | 5.00% |
| 4 | US Treasury 4.25% 01/31/2027 | T 4.25 2027 | 4.80% |
| 5 | US Treasury 4.375% 08/31/2027 | T 4.375 2027 | 4.50% |
| 6 | US Treasury 4.0% 12/31/2026 | T 4.0 2026 | 4.20% |
| 7 | US Treasury 3.875% 03/31/2027 | T 3.875 2027 | 4.00% |
| 8 | US Treasury 5.0% 08/31/2026 | T 5.0 2026 | 3.80% |
| 9 | US Treasury 4.75% 02/28/2028 | T 4.75 2028 | 3.50% |
| 10 | US Treasury 3.5% 04/30/2027 | T 3.5 2027 | 3.30% |
SHY's top holding is US Treasury 4.875% 10/31/2026 (T 4.875 2026) at 6.00%, followed by US Treasury 4.625% 06/30/2027 (T 4.625 2027) at 5.50% and US Treasury 4.5% 11/30/2026 (T 4.5 2026) at 5.00%. The top 10 holdings account for 44.60% of the fund's 85 total positions.
View data table
| Rank | Company | Ticker | Weight |
|---|---|---|---|
| 1 | US Treasury 4.875% 10/31/2026 | T 4.875 2026 | 6.00% |
| 2 | US Treasury 4.625% 06/30/2027 | T 4.625 2027 | 5.50% |
| 3 | US Treasury 4.5% 11/30/2026 | T 4.5 2026 | 5.00% |
| 4 | US Treasury 4.25% 01/31/2027 | T 4.25 2027 | 4.80% |
| 5 | US Treasury 4.375% 08/31/2027 | T 4.375 2027 | 4.50% |
| 6 | US Treasury 4.0% 12/31/2026 | T 4.0 2026 | 4.20% |
| 7 | US Treasury 3.875% 03/31/2027 | T 3.875 2027 | 4.00% |
| 8 | US Treasury 5.0% 08/31/2026 | T 5.0 2026 | 3.80% |
| 9 | US Treasury 4.75% 02/28/2028 | T 4.75 2028 | 3.50% |
| 10 | US Treasury 3.5% 04/30/2027 | T 3.5 2027 | 3.30% |
Want the full framework? This 2-hour ETF course teaches you exactly how to pick, buy, and hold profitable ETFs — from zero to confident investor. Under $15.
Ready to invest? Open an IBKR account in 10 minutes and get free stock. $0 commissions on US ETFs • Fractional shares from $1 • 150+ global markets.
SHY Performance History
Here's how SHY has performed over different time periods. Remember that past performance doesn't guarantee future results, but it gives you a sense of the fund's track record:
YTD
0.80%
1 Year
4.00%
3 Year
2.00%
5 Year
1.80%
10 Year
1.50%
SHY has returned 1.80% annualized over 5 years and 1.50% over 10 years. YTD return is 0.80%.
View data table
| Period | Return |
|---|---|
| YTD | 0.80% |
| 1 Year | 4.00% |
| 3 Year | 2.00% |
| 5 Year | 1.80% |
| 10 Year | 1.50% |
Beginner Suitability Score: 9/10
Our proprietary Beginner Suitability Score evaluates ETFs based on five factors that matter most to new investors: fees, volatility, diversification, dividend history, and track record length.
SHY scores 9/10 because it has very low fees, shows lower-than-average volatility, focuses on 85 selected holdings, and has been available since 2002, giving it a proven track record.
How to Buy SHY — Step by Step
- Open a brokerage account — We recommend Fidelity, Charles Schwab, or Vanguard for ETF investing. All offer $0 commissions on ETF trades.
- Fund your account — Transfer money from your bank. You can start with as little as $1 if your broker offers fractional shares.
- Search for "SHY" — Use the search bar in your brokerage platform to find iShares 1-3 Year Treasury Bond ETF.
- Place your order — Choose "Market Order" for simplicity or "Limit Order" if you want to set a specific price. Enter how many shares (or dollar amount) you want to buy.
- Set up automatic investing — Most brokers let you schedule recurring purchases (e.g., $100/month on the 1st). This is dollar cost averaging in action.
SHY Sector Allocation
Here's how SHY distributes its investments across different sectors of the economy:
SHY's largest sector allocation is Treasury Notes (2-3 year) at 45.0%, followed by Treasury Notes (1-2 year) at 35.0% and Treasury Bills (<1 year) at 10.0%.
View data table
| Sector | Weight |
|---|---|
| Treasury Notes (2-3 year) | 45.0% |
| Treasury Notes (1-2 year) | 35.0% |
| Treasury Bills (<1 year) | 10.0% |
| Treasury Floating Rate | 5.0% |
| Cash & Equivalents | 3.0% |
| Treasury STRIPS | 1.0% |
| Agency Bonds | 0.5% |
| Other Government | 0.5% |
Dollar Cost Averaging Into SHY
Here's what consistent monthly investing could look like over time, assuming an average annual return of 8% (approximate historical stock market average):
| Monthly | 10 Years | 20 Years | 30 Years |
|---|---|---|---|
| $100/mo | $18,417 | $59,295 | $150,030 |
| $250/mo | $46,041 | $148,237 | $375,074 |
| $500/mo | $92,083 | $296,474 | $750,148 |
*Projections assume 8% average annual return with monthly compounding. Actual returns will vary. Past performance doesn't guarantee future results.
Fee impact: With SHY's expense ratio of 0.15%, a $10,000 investment would lose approximately $1,278 to fees over 20 years compared to a zero-fee investment. This is significant — consider whether the fund's strategy justifies these costs.
SHY's expense ratio of 0.15% costs $1,278 on a $10,000 investment over 20 years (assuming 8% annual return). Without fees, the investment would grow to $46,610 instead of $45,332.
View data table
| Year | Without Fees | With Fees | Fee Cost |
|---|---|---|---|
| 0 | $10,000 | $10,000 | $0 |
| 5 | $14,693 | $14,592 | $101 |
| 10 | $21,589 | $21,291 | $298 |
| 15 | $31,722 | $31,067 | $655 |
| 20 | $46,610 | $45,332 | $1,278 |
Pros and Cons of SHY
Pros
- ✓Extremely low interest rate sensitivity with duration under 2 years
- ✓Virtually zero credit risk since holdings are all U.S. government obligations
- ✓Excellent cash alternative that provides yield with minimal price volatility
- ✓Highly liquid with one of the longest track records among Treasury ETFs
Cons
- ✗Lower yields than longer-duration bonds in most interest rate environments
- ✗Returns may barely keep pace with inflation during low-rate periods
- ✗Expense ratio of 0.15% is higher than some ultrashort alternatives and money market funds
SHY vs Similar ETFs
See how SHY stacks up against similar funds:
Frequently Asked Questions
Is SHY a good ETF for beginners?▾
SHY has a Beginner Suitability Score of 9/10 on our scale. This makes it a strong choice for new investors due to its low fees and focused strategy.
What is the expense ratio of SHY?▾
SHY has an expense ratio of 0.15%. This means for every $10,000 you invest, you pay approximately $15 per year in fees. This is considered very low and cost-efficient.
How much money do I need to invest in SHY?▾
You can invest in SHY with as little as $1 through brokers that offer fractional shares (like Fidelity, Schwab, or Robinhood). There is no minimum investment required beyond the share price itself, which changes daily. Dollar cost averaging — investing a fixed amount regularly — is a popular strategy.
Does SHY pay dividends?▾
Yes, SHY pays dividends with a current yield of approximately 3.50%. Dividends are typically paid quarterly and can be reinvested automatically through most brokers.
What are the top holdings in SHY?▾
The top holdings in SHY include US Treasury 4.875% 10/31/2026 (6.00%), US Treasury 4.625% 06/30/2027 (5.50%), US Treasury 4.5% 11/30/2026 (5.00%), and more. The fund holds 85 total positions, providing focused exposure to selected companies.
What sectors does SHY invest in?▾
SHY's largest sector allocations are Treasury Notes (2-3 year) (45.00%), Treasury Notes (1-2 year) (35.00%), Treasury Bills (<1 year) (10.00%). This sector distribution shows a focus on treasury notes (2-3 year) stocks.
How much do SHY's fees cost over time?▾
With an expense ratio of 0.15%, a $10,000 investment in SHY would lose approximately $1,278 to fees over 20 years (assuming 8% annual returns). Consider whether the fund's strategy justifies these costs.