What advantages will I get for investing in bond ETF?

[Njau]

Outline the advantages I will get for investing in bond ETF.

[Faraz]

Exchange-traded funds are nowadays becoming the comfort zone for most investors. You can assure yourself that investing in any funds in ETF; will magnify your gains, bonds ETF being one of them. Typically, ETF tend to pursue an index. You can invest in high-quality funds for either short or long term depending on your objectives, which is similar in treasuries.

Investing in bond ETF for a short period may not be viable if you aim to stay liquid in the market. You usually passively manage these bond ETF. However, if you know how to minimize losses in this market, and at the same time, increase your profits, then you can deal with the short term bond ETF.

Bond ETF come with many benefits. One of them is that this kind of ETF is highly liquid. You can trade bond ETF any time you wish throughout the day. Like stocks, Bond ETF trade on an exchange, and in a stock exchange, you can place trading positions at any time.

While trading in bond ETF, you have a variety of options to choose from. Through this, you can broadly diversify your portfolio. You can invest in low-risk treasuries short-term exchange-traded funds, or you can choose to deal with high-yield bonds. There are ETF such as WisdomTree Dreyfus Chinese Yuan and Euro Funds that you can deal with if you are looking at investing in foreign currencies.

Bond ETF will get you a coupon rate every month. This is a great advantage for them over individual bonds where this interest rate is received every six months. Another significant advantage of bond ETF is that, in cases where the underlying bond is not liquid, the bond ETF liquidity will remain. It is also easy for you to own and use bond ETF. 

Investing in any financial market that offers low costs is a plus for you. Therefore, you should consider investing in bond ETF. They usually offer low fees, and consequently, you can be able to save up some right amount from your earnings.

You will also get consistent risk characteristics in bond ETF. Therefore your liquidations, especially the partial ones, will be much easier.

These advantages in bond ETF can convince you to start dealing with them; however, there are several risks that you need to look at before you invest. By looking at both the risks and the benefits, you can make better investment strategies that will benefit your portfolio.