Individual Bonds vs. Bond Funds: Which Is Better For You?
So, which is better? It depends on what you’re looking for and how you plan on using bonds in your portfolio.
Aaron Levitt is an independent investment analyst and author living in State College, Pennsylvania. His work appears in several high profile publications in both print and on the web. As an advocate for long-term globally oriented investing, Aaron believes that exchange traded funds have leveled playing field for Main Street. Following global macro-economic trends, investors now have several avenues to create great long term portfolios. Aaron is a graduate of The Pennsylvania State University where he studied Economics and International Business. Aside for helping regular investors develop winning portfolios, his current projects include writing his first book about investing in North America’s changing energy landscape.
So, which is better? It depends on what you’re looking for and how you plan on using bonds in your portfolio.
So, which is better? It depends on what you’re looking for and how you plan on using bonds in your portfolio.
Real estate preferred stock features bond-like cash flow that fixed income investors crave, while still owning equity in the buildings themselves.
Real estate preferred stock features bond-like cash flow that fixed income investors crave, while still owning equity in the buildings themselves.
These bonds, secured by pools of loans or the cash flow from other assets can be a helpful tool for investors to get additional yield into their portfolios. However, they also can be minefields.
These bonds, secured by pools of loans or the cash flow from other assets can be a helpful tool for investors to get additional yield into their portfolios. However, they also can be minefields.
Short duration bonds are currently paying some of the best yields in years and offer less risk than longer dated bonds.
Short duration bonds are currently paying some of the best yields in years and offer less risk than longer dated bonds.
For fixed income investors, that may mean reimagining the spilt and taking a different approach that could generate more income and better long-term returns.
For fixed income investors, that may mean reimagining the spilt and taking a different approach that could generate more income and better long-term returns.
So-called Zeros and Separate Trading of Registered Interest and Principal of Securities (STRIPS) offer another way investors can use bonds to build and create income from their portfolios.
So-called Zeros and Separate Trading of Registered Interest and Principal of Securities (STRIPS) offer another way investors can use bonds to build and create income from their portfolios.
Thanks to the ETF boom, there are now numerous funds that use derivatives to reduce a bond portfolio's duration to essentially zero.
Thanks to the ETF boom, there are now numerous funds that use derivatives to reduce a bond portfolio's duration to essentially zero.
Stable value funds offer a quasi-bond/cash hybrid that beats the return on cash while still providing plenty of inflation protection.
Stable value funds offer a quasi-bond/cash hybrid that beats the return on cash while still providing plenty of inflation protection.
Right now, CDs are paying yields not seen in nearly 10 years and offer a chance to lock up secured income during the constrained market environment.
Right now, CDs are paying yields not seen in nearly 10 years and offer a chance to lock up secured income during the constrained market environment.
There’s a vast and growing ecosystem of debt issued by emerging market governments and corporations. And for those investors willing to take on the risk, these bonds could offer plenty of rewards.
There’s a vast and growing ecosystem of debt issued by emerging market governments and corporations. And for those investors willing to take on the risk, these bonds could offer plenty of rewards.
There are a few ways that bond and fixed income investors can shore up their portfolios and get through the year ahead.
There are a few ways that bond and fixed income investors can shore up their portfolios and get through the year ahead.
Target-date maturity exchange traded funds (ETF) could offer the best of the both worlds. And yet, they are underutilized by investors.
Target-date maturity exchange traded funds (ETF) could offer the best of the both worlds. And yet, they are underutilized by investors.
For investors, the downturn in munis could serve as a big buying opportunity.
For investors, the downturn in munis could serve as a big buying opportunity.
Offering a top-notch combination of yield-to-risk while still providing inflation protection, CLOs could be the answer for investors looking to generate returns and income in the challenging market environment.
Offering a top-notch combination of yield-to-risk while still providing inflation protection, CLOs could be the answer for investors looking to generate returns and income in the challenging market environment.
Long-term investors looking for a bit more from their fixed income holdings may want to consider total return bond funds.
Long-term investors looking for a bit more from their fixed income holdings may want to consider total return bond funds.
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