ETF Bond Duration: Intermediate-Term
ETFs, or exchange traded funds, are a type of investment fund that trades on a stock exchange. ETFs are similar to index funds in that they track a basket of securities, but they differ in how they are traded. ETFs are traded like stocks, meaning that they can be bought and sold throughout the day. Bond ETFs are ETFs that invest in bonds. The duration of a bond ETF refers to the average maturity of the bonds held in the fund. Intermediate-term bond ETFs have a duration of 3-10 years. This means that the ETF invests in bonds with maturities in this range. The benefits of investing in an intermediate-term bond ETF include exposure to a variety of different bonds, as well as the potential for higher yields than shorter-term bonds. However, there is also more interest rate risk associated with these ETFs.