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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread -- Ignore unavailable to you. Want to Upgrade?

To: Boca_PETE who wrote (7246)	9/14/2012 1:39:48 PM
From: gronieel2	Read Replies (2) \| Respond to of 10065

If you're interested in shorter term bonds/funds/ETFs, maybe these Defined Maturity Bond Funds will be interesting. How does a defined maturity fund differ from a normal bond fund? The value of a “normal” bond fund will constantly fluctuate as interest rates change. While the value of defined maturity date will also fluctuate, fluctuations based on changes in interest rates will become smaller and smaller as the fund approaches maturity. This is because unlike a traditional bond fund, a defined maturity fund will pay back the full face value of all the bonds it holds (minus defaults) on the maturity date. Put another way, as long as you buy and hold a defined maturity fund to maturity, you don’t need to worry about interest rate risk like you do with a normal bond fund. You can learn more about this here. Sounds like a holding an individual bond? Yes, but you get an important benefit. When you buy a defined maturity fund, your investment will be diversified among dozens, if not hundreds, of bond issues. Below is a list of the Defined Maturity ETF’s and Mutual Funds offered by the 3 main providers of these products: Fidelity, iShares and Guggenheim Bulletshares. learnbonds.com