ETF Daily News thinks target maturity ETFs are underrated. The target fund setup is perfect for the long-term trader because the investor only loses in nominal terms if the fund if there is a widespread default on the underlying bonds or it's is sold before maturity in a rising rate environment.

ETFDN suggests iShares [profile] 2013 S&P AMT-Free Municipal Bond Series ETF all the way through 2018 and iShares 2016 to 2023 Investment Grade Corporate ex-Financials term ETF.

He also suggests Guggenheim[profile] BulletShares target maturity corporate bond funds and high yield bond funds.

Take advantage soon before higher interest rates kick in.:

"Higher rates are not an “if” but a “when.” As the Fed ponders an end to its $85 billion quantitative easing program, investors should shore up their bond funds by moving to target maturity funds ahead of a Fed exit. While rising rates drives down all bonds (and bond funds), investors who use target maturity funds will have nothing to lose as each security is held to maturity."

 

Edited by: Casey Quinlan


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