5 ETFs For A Retirement Portfolio [iShares Trust]

Top nations include Japan and United Kingdom while France, Germany and Switzerland round out the top five for this well-diversified fund. The fund has AUM of $2.35 billion and average daily volume of roughly 1.5 million shares. It charges 39 bps in annual fees and has added 15.3% so far this year (as of April 13, 2015). The fund has a Zacks ETF Rank #2 (Buy) with a low risk outlook.

Schwab U.S. Aggregate Bond ETF (SCHZ)

For a balanced bond portfolio, retirees can consider this ETF as it is spread across the yield curve. With the prospect of hike in key Fed rates this year, short-term bonds and the related ETFs might fall out of investors’ favor. On other hand, long-term bonds remain extremely vulnerable to rising rate risks. So, to bridge the two risks, a balanced approach is needed to ensure first a decent regular income and then capital appreciation.

Moreover, this ETF displays the performance of the U.S. investment grade bonds, indicating minimal default risks. Government bonds account for over 40% of the basket followed by securitized product (28.4%), corporate (21.5%) and cash (8.1%).

The ETF follows the Barclays Capital U.S. Aggregate Bond Index, charging a minimal 6 bps in annual fees from investors. With AUM of $1.5 billion, the fund holds 2,358 top-rated bonds. Volume is good as it exchanges nearly 200,000 shares a day.

The product has a modified adjusted duration of 5.2 years and average maturity of 7.1 years. In terms of yield, the ETF pays out 2.02% in dividend. SCHZ is up 1.5% so far this year while it returned 8.6% over the last three-year period (as of April 13, 2015).

BulletShares 2020 Corporate Bond ETF (BSCK)

Thanks to rock-bottom interest rates of government-backed bonds which offer safe-haven opportunities, the U.S. corporate bond market has been on a solid path as these normally yield more than their treasury cousins. Improving corporate earnings also makes investing in corporate bonds sensible.

This fund looks to track the BulletShares USD Corporate Bond 2020 Index which is designed to represent the performance of a held-to-maturity portfolio of the U.S. dollar-denominated investment-grade corporate bonds with effective maturities in the year 2020. The $282.6 million-fund charges an expense ratio of 25%.

The 188-holding ETF targets the intermediate part of the yield curve with a weighted average maturity of 5.50 years. It is subject to moderate levels of interest rate risk as denoted by an effective duration of 4.75 years. With no security accounting for more than 1.84%, the fund has low concentration risks. BSCK is up 2.44% so far this year and yields 2.50% (as of April 13, 2015).

This article is brought to you courtesy of Zacks.

Pages: 1 2

Leave a Reply

Your email address will not be published. Required fields are marked *