I was doing some window shopping for investment ideas over the weekend and was looking at some term ETFs from Blackrock. These are investment grade ETF's that are similar to holding individual bonds in that they have a specific maturity date that corresponds with the ETF's underlying holdings. When you hit the maturity date the ETF unwinds and they distribute the NAV value of the bonds (which barring a default should be the face amount of the bonds) to you. This is something I have been looking for where I can ladder some investment grade bonds with differing maturities without having to dump 100,000.00 into four separate bonds. These usually hold about 400+ different bonds ranging from AAA to BBB so you do get diversification. The best part is you are not holding them perpetually and you don't have to worry about mass redemptions like in a mutual fund. You can hold to maturity like an individual bond but at the same time get diversification. For the bond fund maturing in December 2023 it is yielding at todays prices 3.89% and the 2022 it is 3.76. I talked to two brokers who were not aware of these and we called blackrock directly to get specifics. I'm just posting this in case anyone is interested in these type of investments. Apparently they are not widely known but they do look like a decent way to invest and ladder corporate bonds without having to put a ton of money in them for single issues.
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Originally Posted by boneil
