In this section, you will find general information about bond ETFs plus specific articles about instruments that allow you to trade online with this type of product from the comfort of your home or mobile device. These particular types of ETFs have bonds as their main reference tool and, as you can see from the list of items below, they can be of various kinds. Some of the most popular are, for example, global bond ETFs, emerging countries, short term, variable rate, high yield, and convertibles. Read also: How to invest in ETFs.
High Yield Bond ETFs
High Yield Bond ETFs refer to funds that aim to replicate the performance of indices that include high yield bonds. A famous example is the iShares iBoxx $ High Yid Corp Bond (HYG), which seeks to track the investment returns of the Markit iBoxx USD Liquid High Yield Index, which is based on high yield US dollar-denominated bonds sold in the US. Another example is the SPDR Barclays Capital High Yield Bond (JNK), which seeks to provide investment returns that match the price and performance results of the Barclays Capital High Yield Very Liquid Index, a bond index that includes bonds with specific requirements such as US dollar denomination, non-investment grade, high yield according to the average rating of Moody’s, S&P, Fitch and a nominal circulating value of at least $600 million (in practice, only very good bonds).
Emerging Country Bond ETFs
The subcategory Emerging Country Bond ETFs, also known as Emerging Markets ETFs, includes ETF-type funds that include bonds from emerging markets, i.e. those that are, for example, part of the BRIC.
Short-Term Bond ETFs
This subcategory includes ETF funds that include short-term bonds. This type of product is optimal for those looking for economic results in a short time. However, it usually presents higher risks.
How to trade Bond ETFs
To trade bond ETFs online, you can either proceed with the classic subscription, starting from the fund manager’s website or proceed with CFDs. Please note that CFDs are much more practical, much less expensive and allow you to trade online from home or from your mobile device. As you can see in our CFD course, CFDs are financial instruments that passively replicate the price of an underlying asset. Bond ETF CFDs, therefore, will see a quote equal to that of the underlying bond ETF, to which a small percentage of the spread (the only form of gain by the broker) will be added. CFDs are leveraged, which allows you to trade on a much larger number of ETFs than you could do with traditional methods for the same budget. For CFD trading, you can also trade with very small amounts of capital. With the CFD trading offered by Plus500, the operational risk is limited to the deposited capital. However, in order to reduce the risks, we recommend you to consult our article dedicated to the Stop Loss order. With Stop Loss orders, the user can easily set a maximum loss percentage, ordering the trading platform to automatically close the position when it exceeds a certain loss threshold set by the same user. Below are the articles dedicated to specific bond ETFs, with their respective real-time charts of CFDs to trade with from your device:
- IShares High Yid Corp Bond
- SPDR Barclays CApital High YIELD Bond
- Vanguard Total Market ETF
- IShares Iboxx Invest Grade Corp Bond
- IShare Barclays 20