Stay Ahead of Rising Rates with Target Date ETFs

5min Business

by 5min Business

The Fed's tapering strategy will cause intermediate bond rates to rise while keeping short rates anchored, says Matt Tucker, Head of iShares Fixed Income Strategy Team. The best way to play the resulting steepening of the yield curve, says Tucker, is to use a barbell strategy in which investors buy long and short maturity ETFs. Another way to protect against interest rate volatility is through the use of target date maturity ETFs.