“These ETFs hit the sweet spot of a market fixated on every Fed move and the threat of higher rates,” Andy Martin, president at 7Twelve Advisors, said in the article.
Currently, investors can select from a range of maturity-date bond ETFs from iShares, Guggenheim Investments and db X-trackers that cover investment-grade corporates, junk and municipal bonds. Additionally, Guggenheim is considering expanding its line to include international fixed-income options. [iShares and Guggenheim Prep ETFs for Rising Rates]
“These are going to keep becoming increasingly popular as an alternative to creating bond ladders, particularly for investors with smaller portfolios,” Mark Donnelly, a portfolio manager at AEPG Wealth Strategies, said. “We’re finding that target-maturity funds appeal to buy and hold investors who want steady income streams without the threat of losing their original principals.”
For more information on target-maturity bonds, visit our target-date ETFs category.
Max Chen contributed to this article.