Anonymous

18 Apr 2019

∙

General Investing

How do bond ETFs work?

1

Discussion (1)

What are your thoughts?

Learn how to style your text

Hariz Arthur Maloy

21 Mar 2019

Independent Financial Advisor at Promiseland Independent

https://www.etf.com/etf-education-center/how-do...

All you need to know.

How Do Bond ETFs Track Their Indexes?

Traditional bond indexes make great benchmarks, but terrible portfolios. Most equity ETFs hold every security in their index. But that's usually not possible with bonds. Bond indexes often include hundreds, even thousands, of individual securities. Buying up all those bonds for an ETF's portfolio is not only difficult, but expensive. The cost to purchase thousands of bonds in illiquid markets, even those with minimal impact on the index, can quickly erode returns.

Reply

Save

Write your thoughts

Related Posts

Is this strategy of combining options and ETF investing viable? I am doing ETF investing, buy world index and global bond index ETFs, DCA every few months. Can it work with options selling?

Currently in my first year of work and have been investing 25% of my monthly take-home into POSB invest-saver & bonds (80% into STI ETF , 20% into SSB) and 25% into savings. Looking to diversify out of SG market once it hits $10k. Suggestions?

Bonds only, should I use it in Endowus all bonds portfolio OR utilise it as a combo of ABF Bond ETF and Nikko SGD corporate bond ETF?

For norm ETFs, it is made up of a basket of stocks. In the case of bonds, is that how bonds ETFs are like as well? If that is the case, isn't it problematic because bonds are constantly maturing?

I am working full time as a part time psych student, graduating soon. I have 2 years of work bond left. Should I pay off my bond and study full time or serve the bond but waste my time away?

Related Posts

Is this strategy of combining options and ETF investing viable? I am doing ETF investing, buy world index and global bond index ETFs, DCA every few months. Can it work with options selling?

Currently in my first year of work and have been investing 25% of my monthly take-home into POSB invest-saver & bonds (80% into STI ETF , 20% into SSB) and 25% into savings. Looking to diversify out of SG market once it hits $10k. Suggestions?

Bonds only, should I use it in Endowus all bonds portfolio OR utilise it as a combo of ABF Bond ETF and Nikko SGD corporate bond ETF?

For norm ETFs, it is made up of a basket of stocks. In the case of bonds, is that how bonds ETFs are like as well? If that is the case, isn't it problematic because bonds are constantly maturing?

I am working full time as a part time psych student, graduating soon. I have 2 years of work bond left. Should I pay off my bond and study full time or serve the bond but waste my time away?