CREATING AN INCOME BAR-BELL
ETFs have democratized access to fixed income, but at the same time they also lost the two most important covenants of bonds: that it will have a maturity date and a consistent coupon/yield.
Even worse, these products, as evidenced by the November 2016 performance, are still subject to duration risk.
A solution I have employed for many years is the income bar-bell which can produce a consistent yield and mitigate volatility.
THINKING ABOUT FIXED INCOME INVESTING
It is important to think more about your intended outcome rather than the past performance of the indexes.
WANT A CONSISTENT YIELD?
We believe investors seeking consistent yield would be best served through a custom bar-bell strategy.
MATURING BOND ETF
For investors seeking a bond ETF that truly matures the only ETF that actually provides this exposure is the PowerShares Build America Bond ETF (BAB) as mentioned on ETF.com.
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