Online trading platform eToro has added five new ETFs to its portfolio: Target Maturity Bond funds.
The new assets are:
- $IBDP
- $IBDQ
- $IBDR
- $IBTG
- $IBTF
A bond fund of this type gives the most similar experience to owning a single bond. This fund holds the bonds in it until they are due, allowing investors to keep the initial yield even if interest rates drop.
Exchange-traded funds (ETFs) that are target maturity funds hold bonds with the same expiration date and life span. The bonds they hold pay out a fixed amount of interest regularly each month, giving investors income. The originally invested sum is paid back upon the fund’s expiration.
Target maturity bond ETFs offer the same benefits as regular bond ETFs, such as wide diversification, easy access, and low costs. The main difference between the two is that the target maturity funds don’t expose investors to interest rate risks. This makes them ideal for those who need to save up for a certain goal, such as retirement or owning a home.
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