TFLO

iShares Treasury Floating Rate Bond ETF (TFLO) is an exchange-traded fund traded on NYSE Arca and managed by BlackRock through the iShares platform. The ETF operates within the U.S. government fixed income segment, focusing on floating rate Treasury securities.

Classified as an international fixed income ETF, TFLO’s objective is to replicate, before fees and expenses, the performance of an index composed of U.S. Treasury securities with floating interest rates, aiming to reduce sensitivity to interest rate movements.

Composition and exposure profile

The ETF’s portfolio is composed of U.S. government fixed income ETF, debt securities issued by the United States government that feature floating interest rates, with coupons periodically adjusted based on short-term money market reference rates. These instruments are backed by the full faith and credit of the U.S. government, offering high credit quality.

The fund’s exposure is concentrated in securities with low credit risk and reduced sensitivity to interest rate movements, as coupon payments adjust over time. This structure results in a low effective duration, making the ETF less vulnerable to rising or volatile interest rate environments.

The portfolio is primarily allocated to short- to medium-term maturities, positioning the ETF with a more defensive fixed-income profile. As a result, the fund generally exhibits lower price volatility compared to fixed-rate bond funds with longer maturities, while maintaining high liquidity and capital preservation characteristics.

Management and operational structure

Management and administration are carried out by BlackRock, one of the world’s largest asset managers. The investment approach is passive, focused on tracking the benchmark index without discretionary allocation decisions.

The ETF’s operational structure includes:

• Secondary market trading of shares.

• Creation and redemption by authorized participants.

• A mechanism that supports alignment between market price and net asset value (NAV).

The management fee follows standard practices for passively managed fixed income ETFs, with no performance fee applied.

History and evolution of the ETF

TFLO was launched in 2014, during a period of expansion in fixed income ETFs designed to address demand for instruments with lower sensitivity to rising interest rate cycles in the United States. In its early years, the ETF gradually consolidated liquidity and expanded its investor base, reflecting demand for short-duration government securities with floating rate structures.

Throughout its history, TFLO has maintained a consistent focus on tracking its benchmark index, with periodic portfolio updates reflecting issuance, maturity, and adjustments of underlying securities.

Between 2020 and 2024, the ETF reflected conditions in the U.S. fixed income market amid monetary policy shifts, interest rate tightening cycles, and increased use of floating rate instruments within institutional and individual investor allocation strategies.