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RBC Target Maturity Corporate Bond ETFs
Old 10-14-2012, 05:59 PM   #1
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RBC Target Maturity Corporate Bond ETFs

Hola,

I was looking for alternatives to invest my short term money and during Bob Brinker's program some one mention these ETF's w/ certain maturity dates. The idea is to buy them like a CD ladder w/fixed maturity dates.

Like always, your ideas and observations are always welcome. The interest in the CD market is soo small that I feel better at keeping my cash under the pillow!!!

Here is the link for the website: Fixed Income ETFs - RBC Global Asset Management


Speedy
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Old 10-14-2012, 06:17 PM   #2
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These ETF's are composed of Canadian corporate bonds. The web site doesn't indicate if the prices shown are USD or CAN. They are sold on the TSX, can you buy them in the US?

A similar product is the Guggenheim Bullet Shares ETFs. They are composed of US corproate bonds. They also offer them in High Yield varieties. They've been in the game longer than RBC. The expense ratio on the Bullet Shares is .24, it is .30 for the RBC Target Maturity Corp Bond ETFs.

These ETFs are an interesting option, and a good way to avoid interest rate risk while getting higher returns than on CDs, etc. But, unlike CDs, they aren't guaranteed. If the economy really goes south and companies default on the underlying bonds . . .
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Old 10-14-2012, 09:26 PM   #3
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A similar product is the Guggenheim Bullet Shares ETFs.
But, unlike CDs, they aren't guaranteed. If the economy really goes south and companies default on the underlying bonds . . .
I always wonder who's in charge of naming these products. It's hard to imagine a Marketing Department brainstorming phrases like "-- to the head!" or "Bite this."

I think this fund ticker was created by Beevis & Butthead: "VFSUX"...
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Old 10-14-2012, 10:27 PM   #4
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Since they trade on the TSX I would asssume they are priced in C$.

Edit to add:
You can buy TSX listed equities in the US if your brokerage handles TSX. If they don't, you need a new brokerage.
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Old 10-15-2012, 08:15 AM   #5
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Quote:
Originally Posted by samclem View Post
These ETF's are composed of Canadian corporate bonds. The web site doesn't indicate if the prices shown are USD or CAN. They are sold on the TSX, can you buy them in the US?

A similar product is the Guggenheim Bullet Shares ETFs. They are composed of US corproate bonds. They also offer them in High Yield varieties. They've been in the game longer than RBC. The expense ratio on the Bullet Shares is .24, it is .30 for the RBC Target Maturity Corp Bond ETFs.

These ETFs are an interesting option, and a good way to avoid interest rate risk while getting higher returns than on CDs, etc. But, unlike CDs, they aren't guaranteed. If the economy really goes south and companies default on the underlying bonds . . .
I took a hard look at the Bullet Shares in the spring when I converted my 401k to an IRA and had to rejigger my bond investments. I found them interesting but didn't pull the trigger, wanting to see them be out there for a while longer before I plunged in. It seemed to me like an easy way to invest in a bond ladder and have diversification, albeit at a 24 bps cost. For now, until interest rate threaten to rise, I'm in Vanguard Short Term, Intermediate and High Yield Corporate Bond Funds and GNMA fund.
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Old 10-17-2012, 08:45 PM   #6
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I always wonder who's in charge of naming these products. It's hard to imagine a Marketing Department brainstorming phrases like "-- to the head!" or "Bite this."

I think this fund ticker was created by Beevis & Butthead: "VFSUX"...
Bullet Repayment Definition | Investopedia
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