Ultimate Guide To COBO

Bonds are an enormous investment category, but investors often have to accept one of two related drawbacks with fixed income investments. Bonds where repayment is not an issue (like U.S. government securities) offer very low yields, while higher-yielding bonds like corporate debentures offer significantly greater repayment risk. Covered bonds are something of a “middle ground,” offering a much more secure credit profile than corporates, but also higher yields than government securities. Now investors can take advantage of an ETF that focuses on these fixed income securities: the ProShares USD Covered Bond ETF [see How To Pick The Right ETF Every Time]. In A Nutshell COBO seeks to replicate the BNP Paribas Diversified USD Covered Bonds Index, which is an index of U.S. dollar-denominated covered bonds. Covered bonds are a type of fixed income security, often issued by financial institutions, that uses a pool of assets (typically mortgages or other loans) to “cover” [...] Click here to read the original article on ETFdb.com. Related Posts: Five Critical Questions To Ask When Investing In ETFs Five Ways To Slash Your ETF Expenses Will Fed’s Exit Strategy Bury MBS ETFs? Daily ETF Roundup: Markets Move As Bernanke Delivers QE3 This Week In ETFs: June 3rd Edition