Related: All Eyes on the Fed Following a Choppy Week
With the uncertainty of further rate hikes in 2019, especially if Fed Chair Jerome Powell delivers a dovish press conference following the decision, here are three ETFs to consider of the short duration variety.
1. SPDR Portfolio Short Term Corp Bd ETF (NYSEArca: SPSB)
With the short-term rate adjustments being instituted by the Fed, investors can limit exposure to long-term debt issues and focus on maturity profiles. An example would be SPSB, which seeks to provide investment results that correspond to the performance of the Bloomberg Barclays U.S. 1-3 Year Corporate Bond Index.
SPSB invests at least 80 percent of its total assets in securities designed to measure the performance of the short-termed U.S. corporate bond market. Ideally, shorter-term bond issues with maturities of three to four years are ideal to minimize duration exposure should the bull market enter another correction phase.
2. Vanguard Short-Term Corporate Bond ETF (NASDAQ: VCSH)
VCSH tracks the performance of the Bloomberg Barclays U.S. 1-5 Year Corporate Bond Index–a market-weighted corporate bond index with a short-term dollar-weighted average maturity. In addition to VCSH allocating capital towards debt issues that are investment-grade, fixed-income investors will like the reduced exposure to duration with maturities between one and five years.
3. iShares Short-Term Corporate Bond ETF (NasdaqGM: IGSB)
Another short-term bond ETF option is the iShares Short-Term Corporate Bond ETF (NasdaqGM: IGSB), which seeks to track the investment results of an index composed of U.S. dollar-denominated investment-grade corporate bonds with remaining maturities between one and five years. IGSB provides investors with exposure to short-term U.S. investment grade corporate bonds.
For more real estate trends, visit ETFTrends.com