Retirees: Looking for a Low-Cost, Low-Volatility ETF? Look No Further.
In the quest for achieving modest returns with rock bottom fees, investors have begun to flock into exchange traded funds (ETFs) as a way of protecting capital from the inflationary pressure of the market and ensuring modest, yet dependable gains year after year.
With many retirees focusing on maintaining a good mix of equities and fixed income securities, obtaining a fixed income ETF which has performed reasonably well in recent years can be difficult to do.
With most major indicators suggesting increasing one’s exposure to equities at the expense of fixed income may still be the way to go, having a percentage of one’s portfolio weighted toward fixed income is still one of the best ways of mitigating market-related risk and smoothing out returns in good times and in bad.
One fixed income ETF which has performed better than the vast majority of its counterparts is the iShares Core Total USD Bond Market ETF (IUSB). This ETF has provided long-term investors with reasonable performance; since its inception to the end of last year, this ETF has produced an annualized return of 2.4%, a return which is nearly 50 bps better than the average fixed income ETF over this time frame.
In times of economic contraction or a protracted selloff, having a decent amount of one’s holdings locked into fixed income securities is one way to mitigate downside in a relatively uncertain trading world today.
Invest wisely, my friends.