Bad timing can hurt bond performance. PowerShares laddered corporate bond ETF (LDRI) helps reduce reinvestment risk, with potentially higher yields than similarly rated government debt.
Bond laddering with ETFs helps investors manage duration risk in a rising-rate environment.
Bad timing can hurt bond performance help reduce reinvestment risk, with potentially higher yields than similarly rated government debt.
Related: Why Are Bond Yields Rising?
“The PowerShares LadderRite 0-5 Year Corporate Bond Portfolio seeks to track the NASDAQ LadderRite 0-5 Year USD Corporate Bond Index (LadderRite Index), which is comprised of investment-grade corporate bonds with maturities of five years or less. The LadderRite index uses a rules-based index methodology that has the potential to reduce turnover and transaction costs and provide a more efficient means of managing interest rate volatility while maintaining a consistent maturity profile,” said PowerShares and NASDAQ in a statement.
LDRI, which qualifies as a strategic beta fixed income offering, could be a new option for investors concerned about rising interest rates to consider due to the ETF’s lower duration and laddering approach.