INVESTING WITH BOND ETFs

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.