After washing investors through October’s volatility machine, the pattern continues to persist in the capital markets as the Dow Jones Industrial Average struggles to recover–a sign that investors should give bonds a closer look–fixed-income exchange-traded funds (ETFs) in particular. Thus far in 2018, the influx of capital has largely focused on fixed-income ETFs focused on Treasury notes.
Other Fixed-Income ETFs to Consider
With the short-term rate adjustments being instituted by the Federal Reserve, investors can limit exposure to long-term debt issues and focus on maturity profiles. As a result, shorter durations are in favor on the fixed-income front to prevent prolonged exposure to a bond market that’s seen its fair share of rising Treasury yields as of late.
Examples of bond ETFs with short duration exposure include the SPDR Portfolio Short Term Corp Bd ETF (NYSEArca: SPSB), which seeks to provide investment results that correspond to the performance of the Bloomberg Barclays U.S. 1-3 Year Corporate Bond Index. Another option is the iShares 1-3 Year Credit Bond ETF (NASDAQ: CSJ), which tracks the investment results of the Bloomberg Barclays U.S. 1-3 Year Credit Bond Index, which includes debt that has a remaining maturity of greater than one year and less than or equal to three years.
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