At a glance
ISHG charges 0.35% a year, above the 0.15% average of the 7 funds most like it (the 7th cheapest of 8). It has $826.2M in assets, the 7th largest of that group; it paid 1.48% of its price in distributions over the past 12 months, annual. Over the past year it returned −1.1% with distributions reinvested, the weakest of those 8 funds; over three years it returned +4.5% a year. At its worst it fell 7.7% in the 2020 crash (S&P 500: 33.7%) and 19.6% in the 2022 bear market (S&P 500: 24.5%), and was back at its earlier high 4 months and 33 months after the lows. Its ten largest positions make up 14.6% of the fund, out of 186 in all.
The short version
iShares 1-3 Year International Treasury Bond ETF (ISHG) holds short-term government bonds from developed countries outside the US, such as France, Germany, Japan and Italy, in their own currencies. Because the bonds aren't in dollars, exchange rates can move its price far more than a typical short-term bond fund's: it fell 37.1% from May 2011 to September 2022. Its 0.35% expense ratio matches its closest rival, BWZ, but is well above US short-term Treasury funds.
Price history
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ISHG -1.1% over the year to Oct 27, 2026, total return with distributions reinvested.
How it has behaved
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | Since start | |
|---|---|---|---|---|---|---|
| ISHG official prospectus, to Dec 31, 2025 | — | +13.29% | — | -1.38% | +0.43% | — |
| FTSE World Broad Investment Grade Bond Index index, same period | — | +8.80% | — | -2.21% | +1.24% | — |
| ISHG price data to Oct 27, 2026 | -2.0% | -1.1% | +4.5% | -0.7% | -0.1% | -0.7% |
- Over the year to Oct 27, 2026, ISHG returned -1.1%, 8th of 8 among similar funds.
- Its 5-year annualized return was -0.7% and its 10-year -0.1%.
- In the 2020 COVID crash it fell 7.7% and regained its old high 4.1 months after the low.
- Its worst full calendar year was 2022 (-10.9%); its best was 2025 (+13.3%).
- The deepest fall in its price history was 37.1% (May 4, 2011 to Sep 27, 2022), not yet recovered.
Show as a table
| Year | Price data | Prospectus (official) |
|---|---|---|
| 2026 (to date) | -1.9% | — |
| 2025 | +13.3% | +13.29% |
| 2024 | -4.1% | -4.12% |
| 2023 | +3.8% | +3.93% |
| 2022 | -10.9% | -11.13% |
| 2021 | -7.0% | -7.03% |
| 2020 | +7.6% | +7.30% |
| 2019 | -0.7% | -0.41% |
| 2018 | -3.5% | -3.67% |
| 2017 | +10.9% | +10.03% |
| 2016 | -2.1% | -1.22% |
| 2015 | -7.7% | — |
| 2014 | -10.1% | — |
| 2013 | -2.5% | — |
| 2012 | +1.6% | — |
| 2011 | -2.9% | — |
| 2010 | +1.1% | — |
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Before this security existed |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Lost 3% over that stretch · deepest drop along the way 7.7%, back to its old high 4.1 months after the low |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Lost 17.9% over that stretch · deepest drop along the way 19.6%, back to its old high 33.1 months after the low |
Dividends and income
Show as a table
| Year | Per share | Change |
|---|---|---|
| 2025 | $1.0900 | -36.6% |
| 2024 | $1.7200 | +1223.1% |
| 2023 | $0.1300 | -87.6% |
| 2021 | $1.0524 | +954.5% |
| 2020 | $0.0998 | -93.0% |
| 2018 | $1.4300 | +266.7% |
| 2017 | $0.3900 | +457.1% |
| 2015 | $0.0700 | -80.6% |
| 2014 | $0.3600 | +71.4% |
| 2013 | $0.2100 | -85.9% |
| 2012 | $1.4900 | -66.0% |
| 2011 | $4.3800 | +338.0% |
| 2010 | $1.0000 |
What's inside
As of Jul 31, 2026, the fund held 186 securities; the ten largest made up 14.59% of assets.
| Holding | Weight | |
|---|---|---|
| Portugal Obrigacoes do Tesouro OT Bonds and notes | 1.92% | |
| Portugal Obrigacoes do Tesouro OT Bonds and notes | 1.71% | |
| Ireland Government Bonds Bonds and notes | 1.46% | |
| French Republic Government Bonds OAT Bonds and notes | 1.45% | |
| Netherlands Government Bonds Bonds and notes | 1.39% | |
| French Republic Government Bonds OAT Bonds and notes | 1.38% | |
| Kingdom of Belgium Government Bonds Bonds and notes | 1.33% | |
| French Republic Government Bonds OAT Bonds and notes | 1.32% | |
| Republic of Austria Government Bonds Bonds and notes | 1.32% | |
| Australia Government Bonds Bonds and notes | 1.32% | |
| Sweden Government Bonds Bonds and notes | 1.30% | |
| New Zealand Government Bonds Bonds and notes | 1.25% | |
| Israel Government Bonds - Fixed Bonds and notes | 1.23% | |
| Israel Government Bonds - Fixed Bonds and notes | 1.22% | |
| Kingdom of Belgium Government Bonds Bonds and notes | 1.20% |
By country
France 10.07%Germany 8.54%Japan 8.35%Italy 8.17%United Kingdom 5.72%By issuer
Foreign governments 98.96%The bonds mature in 1.9 years on average (weighted by size), with an average coupon of 2.04%.
Source: N-PORT holdings report as of Jul 31, 2026. Cash, money-market funds and derivatives are shown separately from the securities list.What changed recently
- Over the three months to Jul 31, 2026, investors added a net $81.3M (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: -0.03%, -2.19%, +1.19%.
How it works
ISHG tracks the FTSE World Government Bond Index – Developed Markets 1-3 Years Capped Select Index, run by FTSE Fixed Income LLC. The index holds fixed-rate, investment-grade government bonds issued in local currencies with one to three years left until they mature. A country qualifies only if the International Monetary Fund or the World Bank classifies it as developed, it meets FTSE's market-access standards, and its bond market is larger than USD 50 billion, EUR 40 billion and JPY 5 trillion. The US is excluded. New bonds need a rating of at least A- from S&P and A3 from Moody's.
Bonds are weighted by market value, with two caps. No country can exceed 21%, and the countries above 4.6% together can't exceed 47%. The index rebalances at each month end and had 166 bonds as of October 31, 2025. BlackRock's adviser, BFA, uses "representative sampling," meaning it buys a selection of bonds with similar maturity, duration (sensitivity to interest rates), credit quality and yield instead of every index bond. As of July 31, 2026, the fund held 186 bonds with an average maturity of 1.9 years and no derivatives.
Two mechanics matter. First, bonds that drop below one year to maturity leave the index and get replaced, which helps explain the 78% portfolio turnover. Second, the fund's value is counted in US dollars. If the euro or yen falls against the dollar, the fund's value can fall even when the bonds' prices hold steady.
What it really costs
- ISHG charges 0.35% a year, versus an average of 0.15% for the similar funds below (7th of 8, cheapest first).
- Using the prospectus's standard example, $10,000 invested would cost about $36 in the first year and $443 over 10 years (assuming a 5% annual return).
| Cost of $10,000 (SEC example) | 1 yr | 3 yrs | 5 yrs | 10 yrs |
|---|---|---|---|---|
| ISHG | $36 | $113 | $197 | $443 |
Structure and tax notes
- Bond prices move opposite to interest rates; the longer the maturities it holds, the more its price reacts to rate changes.
In a retirement portfolio
It adds exposure to foreign currencies and non-US government bonds, but its large currency-driven declines make it a poor fit as a defensive or core bond holding.
ISHG adds something US bond funds don't: exposure to the euro, yen, pound and other developed-market currencies. That has brought bigger swings than its 1.9-year average maturity suggests. In the 2020 COVID crash it fell 7.7% and recovered in about four months. In 2022 it dropped 19.6% and took about 33 months, until July 2, 2025, to recover. 2022 was also its worst calendar year, at -11.13%. Its deepest drop, 37.1% from May 2011 to September 2022, had not been recovered as of October 27, 2026. Its price history doesn't cover 2008.
Anyone who sold during one of those stretches would have locked in losses. Income is modest: a 1.48% trailing yield as of October 27, 2026, paid once a year. The SEC's standard example puts costs at $36 in the first year on $10,000. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- Investors seeking short-term exposure to the euro, yen and pound through highly rated government bonds from France, Germany, Japan, Italy and others.
- Portfolios wanting a small holding with low stock-market sensitivity; its one-year beta was 0.21 as of October 27, 2026.
- Holders who accept currency-driven swings in exchange for 186 bonds across many developed countries, with no country above the index's 21% cap.
Look elsewhere if
- Retirees wanting steady short-term bonds: ISHG fell 37.1% from 2011 to 2022 and had not recovered as of October 27, 2026.
- Cost-focused investors: its 0.35% expense ratio compares with 0.03% for VGSH and 0.15% for SHY, which hold US Treasuries instead.
- Anyone needing regular income: it pays annually, and its trailing yield was 1.48% as of October 27, 2026.
Close alternatives
Matched by bond funds with the closest average maturity and issuer mix (N-PORT).
| Fund | Avg. maturity | Cost | Net assets | 1 yr | 3 yr |
|---|---|---|---|---|---|
| ISHG this fund | 1.9 yrs | 0.35% | $826.2M | -1.1% | +4.5% |
| BWZ SPDR Bloomberg Short Term International Tre… | 1.9 yrs | 0.35% | $294.4M | -0.7% | +3.4% |
| VGSH Vanguard Short-Term Treasury ETF | 1.9 yrs | 0.03% | $39.20B | +2.2% | +4.2% |
| SHY iShares 1-3 Year Treasury Bond ETF | 1.9 yrs | 0.15% | $25.91B | +1.7% | +3.9% |
| USFR WisdomTree Floating Rate Treasury Fund | 1.5 yrs | 0.15% | $18.76B | +4.1% | +4.6% |
| SHV iShares Short Treasury Bond ETF | 0.3 yrs | 0.15% | $20.97B | +3.3% | +4.3% |
| BIL SPDR Bloomberg 1-3 Month T-Bill ETF | 0.2 yrs | 0.1356% | $47.08B | +3.3% | +4.3% |
| SGOV iShares 0-3 Month Treasury Bond ETF | 0.1 yrs | 0.09% | $105.98B | +3.4% | +4.4% |
Questions investors ask
Is ISHG currency hedged?
The prospectus doesn't describe any currency hedging. ISHG's index measures bonds in their local currencies, and the prospectus warns that the fund's value, counted in US dollars, can fall if those currencies weaken against the dollar. As of July 31, 2026, the fund held no derivatives, which hedged funds usually use. So the euro, yen and other currencies are a major driver of returns, alongside interest rates.
What's the difference between ISHG and BWZ?
They are close cousins. Both hold short-term non-US government bonds, both charge 0.35%, and both had an average maturity of 1.9 years. ISHG follows a FTSE index, while BWZ, from SPDR, follows a Bloomberg index. ISHG is larger, with $826 million in net assets as of July 31, 2026, against $294 million for BWZ as of June 30, 2026. As of October 27, 2026, ISHG returned -1.1% over one year and 4.5% a year over three years, while BWZ returned -0.7% and 3.4%.
Does ISHG pay monthly dividends?
No. ISHG pays its income once a year, not monthly. Over the 12 months to October 27, 2026, it paid $1.09 per share, for a trailing yield of 1.48%. Payouts can vary. The prospectus warns that income may fall when rates drop, because maturing bonds get replaced with lower-yielding ones. Retirees who need steady monthly cash would have to plan around a single annual payment.
Why has ISHG lost money if it holds short-term bonds?
Mostly because of currencies and rising rates. Short maturities limit interest-rate risk, but ISHG's bonds are in foreign currencies, so a stronger dollar lowers their value for US holders. The fund lost 7.03% in 2021 and 11.13% in 2022. Its worst quarter was -7.72%, in the quarter ended September 30, 2022. As of December 31, 2025, its average annual return was -1.38% over five years and 0.43% over ten years.
Is ISHG a good alternative to SHY?
They do different jobs. SHY, also from iShares, holds US Treasuries maturing in one to three years and charges 0.15%, compared with ISHG's 0.35%. ISHG skips the US entirely and adds currency risk. Their one-year returns show the gap: ISHG returned -1.1% through October 27, 2026, while SHY returned 2.1% through October 30, 2026. Over three years they were closer, at 4.5% and 4.1% a year.