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Target Maturity Bond ETF for a bond ladder.
Old 03-04-2015, 01:58 PM   #1
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Target Maturity Bond ETF for a bond ladder.

Is anyone holding iShare Target Maturity ETFs for their bond ladder?
They pay better than CDs (of course they aren't FDIC insured), and I would hold them to maturity so the interest rate risk is not as evident, while the diversified nature of a fund keeps default risk low. Some interest rate risk is still there, but it doesn't seem the same to me as in a fund like AGG. Is that just a trick I'm playing on myself?
I am going to add IDBD and IBDH to cover minimal expenses for 2018, and half of 2019. Anyone know of a downside to these funds that I might not be considering?

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Old 03-04-2015, 02:22 PM   #2
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The bulletshares version from guggenheim has been discussed a few times.

BulletShares - Exchange Traded Funds | Guggenheim Investments - Investment Management for Financial Professionals

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Old 03-04-2015, 03:04 PM   #3
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Searching on Bullet brought up much more.
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Old 03-05-2015, 08:37 AM   #4
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I own both iBond and Bulletshares as a CD substitute. One advantage is that I can hold them in my Vanguard IRA whereas if I used bank CDs I would need to have numerous IRA accounts to stay under the FDIC limits.

The only cautions I would make is that it can be a bit tricky to buy them in a way that minimizes the premium paid so be patient and use limit orders and the structure results in a poor yield in the maturity year but I'll probably just sell them a year befote they mature.
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Old 03-05-2015, 05:25 PM   #5
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Yes, pretty illiquid so use limits!

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