I Heart BulletShares ETFs

May 03, 2012

 

And iShares Too!

Lest I sound a bit overenthusiastic about Guggenheim, it’s worth noting that iShares markets a similar product line that focuses on municipal bonds.

The six target-maturity-date muni funds iShares currently has on the market have maturities between 2012 and 2017, and together have almost $200 million in assets. Their assets have been growing in the past two years too, but not quite as quickly as those in Guggenheim’s BulletShares.

And that makes me wonder: Why aren’t more ETF companies clamoring to get into this space of target-date-maturity bond funds?

Maybe it’s too much of a pain for fund sponsors to have to shut down funds instead of just having an open-ended bond portfolio that continually evolves and operates in perpetuity.

Or maybe investors and advisors prefer a set-and-forget approach rather than having to reinvest a chunk of money every year, thereby limiting demand for such innovative funds. Or maybe I’m missing something.

With everyone wringing their hands waiting for the great bull market in bonds to unravel, it seems a propitious time for investors to at least take a closer look at bond funds that behave quite a lot like actual bonds and figure out a creative strategy to survive the transition to higher rates.

The following nine ETFs alluded to above are the investment-grade investment funds from Guggenheim:

(NYSEArca: BSCC), (NYSEArca: BSCD), (NYSEArca: BSCE), (NYSEArca: BSCF), (NYSEArca: BSCG), (NYSEArca: BSCH), (NYSEArca: BSCI), (NYSEArca: BSCJ), (NYSEArca: BSCK)

The following seven ETFs alluded to above are the high-yield corporate bond funds from Guggenheim:

(NYSEArca: BSJC), (NYSEArca: BSJD), (NYSEArca: BSJE), (NYSEArca: BSJF), (NYSEArca: BSJG), (NYSEArca: BSJH), (NYSEArca: BSJI)

The following six ETFs alluded to above are the municipal bond funds from iShares:

(NYSEArca: MUAA), (NYSEArca: MUAB), (NYSEArca: MUAC), (NYSEArca: MUAD), (NYSEArca: MUAE), (NYSEArca: MUAF)

 

 

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