3 Firms Launch New Bond Funds That Offer Variations On The Bond Laddering Theme
The new funds are designed make it easier for advisors to tailor bond funds to clients’ income needs.
PIMCO Real Income 2019 and PIMCO Real Income 2029 contain Treasury Inflation-Protected Securities with a variety of maturities to produce predictable monthly income. These funds are designed to pay down the principal by the maturity date to maximize the payouts, and they are not cheap, according to Financial Planner.
Fidelity launched four defined-maturity muni bond funds with different maturity dates: Fidelity Municipal Income 2015, Fidelity Municipal Income 2017, Fidelity Municipal Income 2019 and Fidelity Municipal Income 2021. Advisors can use these funds to create a ladder of funds rather than a ladder of individual bonds, choosing a mix of maturities based on the clients’ income needs.
iShares already had launched a set of muni-bond ETFs that target each year from 2012-2017 and that liquidate on the maturity date with the money returned to shareholders. iShares funds are passively managed and feature an expense ratio of 0.3%.