ETF Bond Type: Leveraged Bonds
Leveraged bonds are a type of exchange-traded fund (ETF), and have become an increasingly popular investment tool. These specialized yet sophisticated tools allow investors to increase their potential return with an increased risk compared to regular ETFs. Leveraged bonds use the leverage of a borrower or issuer in order to provide access to higher returns and yield than traditional bond investments. Furthermore, they also benefit from the liquidity afforded by being exchange traded. Given their relative simplicity and flexibility when it comes to structure, leveraged bonds can be a great low cost way for investors to increase their portfolio's exposure potentially higher yields whilst minimizing some of the risk associated with other types of ETFs.