Bond ETFs In Focus: Defining All The Yield Metrics

Interest in fixed income ETFs has skyrocketed in recent years, as investors have embraced the exchange-traded structure as an efficient means of establishing exposure to a core asset class. Though inflows in recent years have accelerated, the growth of this corner of the ETF market lagged behind the equity space, in part because some of the nuances of bond ETFs. For one, the “yield experience” of most bond ETFs varies drastically from the experience of holding a single bond; most bond ETFs operate indefinitely, maintaining a relatively stable duration and risk profile across time. Investors holding a single bond, on the other hand, will receive a series of coupon payments and return of principal upon maturity, meaning that the duration contracts as the end of the term approaches and risk is reduced [see Are Bond ETFs Broken?]. Assessing the yield potential of a bond ETF can also require a bit [...] Click here to read the original article on ETFdb.com. Related Posts: Inverse Bond ETFs: Highlighting All The Options ProShares Debuts Short Junk Bond ETF (SJB) ETFs For The Forgotten Asset Classes PHB: Different Kind Of Junk Bond ETF 2010: Year Of The Bond ETF