It appears that fixed-income exchange traded funds (ETFs) are the investment type du jour. PowerShares has three new fixed-income ETFs set to launch November 15. The most creative of the three is a VRDO, or municipal variable rate demand obligation, reports Heather Bell for Index Universe. These allow investors to put the debt obligation back to the issuer at par, plus accrued interest during certain points of maturity. Because of this nature, they are actually considered short-term investments rather than long-term, even though some may take as long as 40 years to mature. Interest rates are floating and reset on a daily or weekly basis.

Barclay’s Global Investors iShares family presented the first of the fixed income, followed by State Street Global Advisors. It is likely there will be more of these fixed-income ETFs from those providers.

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