August 6, 2013
BSJH is a relatively new ETF concept that is designed to hold corporate bonds to maturity. This is an attractive concept for the smaller investor who either does not want to invest the time in researching individual corporate bonds, or who does NOT have the very large portfolio that is required to get the diversification that is needed. (Keep in mind individual bond investing is the best approach if you have the research time and money to support this approach.)
Enter defined maturity bond etf’s. These types of ETFs typically buy bonds that mature in the year the fund will terminate, ensuring that investors can collect the bonds face value at maturity. (In contrast, a regular bond ETF or fund has the risk of losing original principal if interest rates go up.)
BSJH is paying around 5% on a monthly basis. This is a high yield bond investment and is considered more on the risk side since the fund contains non-investment grade bonds. Buy a small amount in the IRA to start. http://guggenheiminvestments.com/products/etf/bsjh
YOU MUST PLAN ON HOLDING THIS TO MATURITY OTHERWISE YOUR POSITION IS COMPROMISED. Also keep in mind these funds will not make you rich. The yield is on the small side but they do provide steady income at very Low Risk. And they offer safety. They do offer diversification among a hundred bonds, and importantly it offers the smaller investor who does not have a million dollars the opportunity to get into the corporate bond market. I would consider these a replacement for CDs or Treasuries that are paying less.
BSJE is also a buy if you can get a price closer to $25.00……in the case of BSJE you should wait for some sort of economic hiccup and try to buy it On Sale around $26.00 Hold to maturity. Buy up to 1% of the portfolio. Do NOT overpay.
Go to “HOME” (top of page) for the most current posts. (Please respond to POLL Click Here) This blog discusses dividend paying investments that I find appropriate for myself…..and for investors seeking dividends and income. I am not an investment professional. You must do your own research before buying any position. All gains or losses that you realize are based on your choices.