UTHY is part of the first single-bond ETFs suite. The targeted holding makes this ETF very different from other ETFs holding a basket of 30-year Treasury bonds. This is a tool used in portfolio management. The fund tracks an index that holds just the on-the-run 30-year US Treasury bond, which is the most recently issued and most liquid 30-year Treasury bond. To qualify for selection, a bond must be auctioned on or before the third business day before the last business day of the month. At each monthly rebalancing, the underlying issue is sold and rolled into a newly selected issue, given that there has been a new public sale or auction by the US Government for 30-year Treasury bonds. This roll transition occurs on one day, each month. The fund pays transaction costs when it buys and sells securities. These costs are not reflected in the annual fund operating expenses and should be expected. In addition, the fund will experience very high turnover. This may result in higher taxes, as compared to other ETFs, if the shares are held in a taxable account.
