Invesco PowerShares Managing Director Dan Draper discussed exchange traded fund strategies for rising interest rate environments with ETF Trends Publisher Tom Lydon at the Morningstar ETF Conference in Chicago.
Draper highlighted the recently launched PowerShares LadderRite 0-5 Year Corporate Bond Portfolio (NYSEArca: LDRI) as an avenue for advisors and investors to maintain risk-adjusted fixed income exposure while mitigating duration concerns.
A laddered fixed-income strategy helps provide incremental exposure to debt securities with varying maturity dates as a way to hedge against the potential negative effects of rising interest rates.
With its zero to five-maturity horizon, LDRI wraps bonds with various maturities of five years or less into a single ETF.
LDRI works for advisors that want to take a laddered approach with lower duration, Draper told Lydon.
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