Target-Date Bond ETFs

While most investors and advisors are curtailing their exposure to fixed-income assets, some exchange traded fund providers plan to expand their bonds lineup, but doing so with rising interest rates in mind.

BlackRock’s iShares is planning on increasing the number of its iSharesBond target-maturity ETFs, and Guggenheim Investments is working on expanding its line of BulletShares target-maturity corporate and high-yield ETFs, reports Jackie Noblett for Ignites.

According to an SEC filing, iShares is working on the  iSharesBond 2023 Corporate Term ETF (NYSEArca: IBDD), which will hold U.S. dollar-denominated, investment grade corporate bonds that mature after March 31, 2022 and before April 1, 2023.

iShares has a suite of target maturity municipal bond ETFs for each year from 2013 to 2018, and the firm recently launched corporate bonds target maturity bond ETFs that exclude the financial sector for the years 2016, 2018, 2020 and 2023.

According to an SEC filing, Guggenheim is also working on expanding its line with the Guggenheim BulletShares 2022 Corporate Bond ETF (NYSEArca: BSCM), Guggenheim BulletShares 2023 Corporate Bond ETF (NYSEArca: BSCN), Guggenheim BulletShares 2024 Corporate Bond ETF (NYSEArca: BSCP) and Guggenheim BulletShares 2025 Corporate Bond ETF (NYSEArca: BSCQ).

Guggenheim currently offers a range of target-date investment-grade corporate bonds for each year from 2013 to 2020 and high-yield bonds for each year from 2013 to 2018.

Target maturity bond ETFs distribute payments throughout the life of the fund, track a group of bonds that are expected to mature in a given year, collect on the bonds’ face value at maturity and pass the cash on to investors, similar to holding an individual bond to maturity. [Limit Interest Rate Exposure with Defined-Maturity Bond ETFs]