NEW YORK ( TheStreet) -- An important part of building a bond portfolio is creating a reliable income stream.
That task has been difficult to do with exchange traded funds. The reason is that an ETF, such as the iShares 10+ Year Credit Bond Fund (CLY), will always target the same maturity, and income will rise or fall as investors snap up or dump individual securities.
Claymore is attempting to mitigate that problem with a new suite of corporate bond funds that mature like individual bonds. For example, all of the bonds in the Claymore BulletShares 2016 Corporate Bond ETF (BSCG) mature in 2016 and the fund itself will liquidate at the end of that year.
Here's the lineup:Claymore BulletShares 2011 Corporate Bond ETF Claymore BulletShares 2012 Corporate Bond ETF Claymore BulletShares 2013 Corporate Bond ETF Claymore BulletShares 2014 Corporate Bond ETF Claymore BulletShares 2015 Corporate Bond ETF Claymore BulletShares 2016 Corporate Bond ETF Claymore BulletShares 2017 Corporate Bond ETF The concept is a big improvement in enabling investors to get closer to locking in a yield. A couple of years from now, any buying interest in, for example, the 2017 fund would likely mean that the fund would have to buy bonds in the open market that mature in 2017. New purchases to meet that demand would be at prevailing rates, higher or lower. This could affect the yield of the fund. Another potential snag would be if one of the bonds in the fund defaulted. On that point, it's worth noting that all of the ETFs are dominated by bonds from financial companies. The exposures range from 40% for the 2016 to 56% for the 2015 fund. Though many of the banks in the fund were "too big to fail," that doesn't future impairments won't take place. Still, financial companies issue the most bonds, so many fixed-income investors are in the same boat.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV