Topic: How To Invest

Q: I have been considering the following ETF and would appreciate your take on it. The iShares 1-5 Yr Laddered Corporate Bond Index ETF. Thank you.

Article Excerpt

A: The iShares 1-5 Yr Laddered Corporate Bond Index ETF, $17.24, symbol CBO on Toronto (Units outstanding: 41.6 million; Market cap: $717.2 million;, invests in a portfolio of short-term and medium-term corporate bonds. They’re drawn from the FTSE (Financial Times Stock Exchange) 1-5 Year Laddered Corporate Bond Index. The MER for the iShares 1-5 Yr Laddered is 0.28%. The fund currently yields 2.8%. The ETF first sold units to the public at $20 each and began trading on Toronto on February 25, 2009. The fund’s 344 holdings are divided into five “laddered,” or staggered, maturities that generally range from one to five years. Each maturity is equally weighted. Each year, the two-year to five-year bonds will be a year closer to maturity and one-year bonds will have reached maturity. The fund uses the proceeds of the matured bonds to “roll over” or buy new bonds that restore the desired one to five year portfolio balance. The ETF’s portfolio is weighted 56.6% toward financials,…