Investing with bond ETFs

INVESTING WITH BOND ETFs

Financial Professionals are turning to bond ETFs to help them achieve their fixed income allocation goals while keeping costs low.

BOND ETFs OFFER COMPETITIVE BENEFITS, JUST LIKE EQUITY ETFs

Competitive performance
COMPETITIVE PERFORMANCE
iShares bond ETFs have outperformed 48% of their peers over the last 3 years.1
Low cost
LOW COST
On average, iShares bond ETFs cost 80% less than active mutual funds.2
Liquidity when you need it
LIQUIDITY WHEN YOU NEED IT
Bond ETFs trade thousands of times throughout the day on the exchange, while individual bonds may not trade daily.3

GETTING STARTED WITH BOND ETFs

Whether your clients' goals are income, capital preservation or equity diversification, iShares bond ETFs can help you meet their needs.

Diversify equity risk
DIVERSIFY EQUITY RISK
If market fluctuations are a concern, consider diversifying equity risk with iShares Core U.S. Aggregate Bond ETF.
Put cash to work
PUT CASH TO WORK
Help maximize current income through short-term bonds with BlackRock Short Maturity Bond ETF.
Seek enhanced income generation
SEEK ENHANCED INCOME GENERATION
Strive for enhanced income and performance potential with iShares Broad USD High Yield Corporate Bond ETF.

HOW TO BLEND BOND ETFs AND ACTIVE FUNDS

The BlackRock Bond Pyramid showcases ways to blend active funds with bond ETFs to help meet portfolio goals or prepare for changing markets.

  • Over the last two decades, falling interest rates have made buying a home so much easier. 

    The reverse has happened with portfolio construction – low interest rates tend to make building portfolios more complex.

    But today, with rates so low, you need to think harder about what role you want bonds to play in your portfolio, because no one bond fund can do it all.

    Core bonds can diversify equities providing protection when stocks sell off.

    Low duration and flexible funds seek capital preservation, looking for consistent returns across all markets.

    While high yield funds can generate high income.

    So what's the right bond mix for your portfolio? Here's where some investors get stuck.

    One common mistake is many investors who take an aggressive approach to their stock portfolio tend to buy aggressive bonds, adding high yield to their equity-heavy portfolio.

    But this is the opposite of what they should do, because, as your overall portfolio allocation gets more aggressive the bonds within it actually need to be more conservative.

    We call this “The Bond Paradox.”

    That’s where the BlackRock Bond Pyramid comes in - here's how it works.

    An aggressive equity investor needs their limited bond allocation to diversify stocks. That means they should consider owning conservative bonds with high credit quality and longer duration.

    On the other hand, a conservative investor who has less stock risk may want to dip more into credit and higher income bond funds for yield.

    The BlackRock Bond Pyramid makes it easy to tailor your bonds to your overall asset allocation.

    Start building a better bond portfolio today!

    Carefully consider the Funds' investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds' prospectuses or, if available, the summary prospectuses which may be obtained by visiting the Funds’ prospectus pages on ishares.com and blackrock.com. Read the prospectus carefully before investing.

IMPROVING PORTFOLIO OUTCOMES
Discover how the diversification and liquidity characteristics of bond ETFs could help improve portfolio outcomes when blended with individual bond holdings.
IMPROVING PORTFOLIO OUTCOMES