The recently launched BulletShares suite of maturity-target-date investment-grade corporate bond exchange traded funds (ETFs) offer a more targeted exposure to the corporate bond market in an increasingly changing fixed-income market. The suite of ETFs allow for highly individualized investment strategies.
In an interview with Jonathan Liss for Yahoo! Finance, Steven A. Baffico, Senior Managing Director at Guggenheim Partners – Claymore Securities and head of U.S. Retail Distribution for the firm, and Darrin DeCosta, Head of Product Development for Accretive Asset management LLC, talked about Claymore’s recently launched BulletShares suite of maturity-date corporate bond ETFs. [7 New Claymore Maturity-Date Corporate Bond ETFs.]
High-net worth individuals generally preferred individual bonds over packaged bond products. The funds weren’t sufficiently target-date/life-cycle driven for those investors’ purposes, remarks DeCosta. The BulletShares suite offers sufficient cash flow, addresses date-specific lifestyle issues and provides diversification in bonds. [Corporate Bond ETF Interest Generates Cash.]
The ETF undergoes a “sampling” strategy in which bonds from the underlying index include at least one “BBB” rating from at least one rating agency, which they define as “investment grade,” but most of the securities have multiple ratings of “BBB” or higher. Each ETF will hold a group of 30 to 40 securities, and the number may expand over time. It should be noted that the suite of ETFs have a large proportion of holdings in the financial sector.