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A Word of Caution About Bond ETFs

Book Description

This Element is an excerpt from Higher Returns from Safe Investments: Using Bonds, Stocks, and Options to Generate Lifetime Income (9780137003358) by Marvin Appel. Available in print and digital formats.

Why bond ETFs may not be as safe as they look: what to know before you invest

At first glance, ETFs would seem ideally suited for bond investors because they have lower expense ratios than almost all mutual funds, which leaves more interest income available for shareholders. The problem with many bond ETFs is that their prices have displayed surprisingly large short-term fluctuations.