Are bonds ETFs useful?
Bond ETFs are a good choice for investors who stabilize their portfolio and want to achieve regular income. In phases of rising interest rates or high inflation, however, you should pay close attention to the terms and bond types.
Advantages of bond ETFs
1. Diversification. Bond ETFs offer access to a wide portfolio of bonds, which reduces the risk compared to individual bonds.
Part of the entire outstanding value of corporate and government bonds in 2024, to countries.
Source: Statista
2. Liquidity. Since they are traded on the stock exchange, bond ETFs can be sold and sold at any time, which makes them more flexible than traditional bonds.
3. Low capital operation. In contrast to direct investments in bonds, in which high minimum pieces often apply, bonds ETFs can also be traded with little capital.
4. Cost savings. The administrative costs are often lower than in the case of actively managed funds, since ETFs are managed passively.
5. Stable yields. Bonds usually pay regular interest rates, which makes it attractive to income-oriented investors.
Open an account with a specialist for ETFs.
Simply open a multi-market account.
What are my risks?
1. Interest risk. Rising interest rates often lead to falling bond prices, which can have a negative impact on the performance of bond ETFs.
2. Credit risk. Company and high interest rates are susceptible to defaults on payment, which can affect the ETF course.
3. Inflation risk. If inflation increases, the real return of bonds can drop. Inflation-protected bonds offer a solution here.
4. Currency risk: International bond ETFs are subject to exchange rate fluctuations, which can lead to unexpected losses or profits.
Bonds ETFs for European investors ….