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I was recently reading a bit on the iSHARES offering iBonds, essentially a laddered bond ETF’s.
https://www.ishares.com/us/strategies/bond-etfs/build-better-bond-ladders
The advantage I see is that these are not perpetual bonds like an ETF (as in the ETF will cease to exist as of the maturity date and return the money) and unlike an individual bond offering, is slightly more diversified. They also come silo of flavors (US government, Corporate, Municipals & TIPS).
I think (am not sure) that at maturity the number of shares multiplied by the final NAV will be returned (happy to hear if anyone has more insights into how this works).
Any thoughts? Thanks
I highly recommend educating yourself about I-bonds at https://tipswatch.com/ . They have many articles about I-Bonds, I-Bond strategies and I-bond ETFs. I purchase my I-Bonds at Treasury Direct. You might be interested in TIPS in your retirement account. That website has many articles on TIP ladders. Of course, Humble Dollar has many articles also: https://humbledollar.com/?s=TIPS+ladder
It’s a shame BlackRock decided to call their ETFs iBonds because they have nothing to do with I-Bonds from TreasuryDirect.
Thank you Randy, I was just going to point that out to Tom.
@Tom – These iBond offerings from Blackrock are not the same as the inflation protection bonds (I-bonds) from the treasury. The nomenclature from Blackrock is slightly confusing.
What these iBond ETF’s are, are a laddered bond ETF with a target maturity date. So IBTF – iShares® iBonds® Dec 2025 Term Treasury ETF has US treasury bonds/notes/bills that will mature by Dec 2025.