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More Target-Date Bond ETFs Provide Rising Rate Hedge


Guggenheim Investments is expanding its fast-growing suite of BulletShares that combine features of bond funds and individual bonds designed to help fixed-income investors deal with rising interest rates.

The firm launched Guggenheim BulletShares 2021 Corporate Bond ETF (NYSE Arca: BSCL) and Guggenheim BulletShares 2022 Corporate Bond ETF (NYSE Arca: BSCM).

“Given the Federal Reserve’s plan to ease stimulus and increase interest rates, target date maturity ETFs represent an attractive alternative to traditional bond funds. Specifically, these ETFs can act as a hedge against higher interest rates, which would likely diminish returns of traditional bond funds,” Guggenheim Investments said.

“Defined maturity ETFs can also help investors meet specific savings and retirement goals,” the asset manager noted. “Defined maturity exposure, particularly through portfolios of either investment-grade or high-yield corporate bonds, enables investors to build customized portfolios tailored to specific maturity profiles, risk preferences and investment goals.” [Target-Maturity Bond ETFs]

Target-maturity bond ETFs have gathered $174 million since mid-May when Treasury yields started to jump.

Last year the assets in BulletShares more than doubled and year to date through June the lineup is up 56%, Guggenheim said. [iShares and Guggenheim Prep ETFs for Rising Rates]

The Guggenheim BulletShares family consists of 16 fixed-income defined-maturity corporate bond and high yield corporate bond ETFs.

“Unlike other fixed-income ETFs, BulletShares are designed to mature in their target year—providing investors with specific target maturities to ladder portfolios or to manage within specific investment time frames,” the firm said.

“Defined-maturity continues to be a proven investment strategy for investors looking to save for events like retirement amid a volatile economic environment,” said William Belden, head of product development at Guggenheim Investments. “We pioneered this segment of the market with the first BulletShares in 2011, and are excited to grow our existing line-up with two new corporate bond ETFs.”

Last week, BlackRock launched more defined-maturity iShares ETFs to boost its own lineup. [iShares Rolls Out More Defined-Maturity Bond ETFs]

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