IBHE ETF

iShares iBonds 2025 Term High Yield and Income ETF has a set termination date of December 2025, offering clear visibility into its maturity timeline and risk profile. The fund has a short duration of 0.57 years, which means it is less sensitive to interest rate and credit risk. This duration will continue to decrease as bonds mature. IBHE offers a 5.93% 30-day SEC yield and a 6.1% average yield to maturity, making it appealing for investors seeking higher returns compared to traditional money market funds.

iShares iBonds 2025 Term High Yield and Income ETF has an attractive 7% yield, but it is not a long-term investment. It is a bond ladder rung. Bond ladder ETFs are designed to be held until redemption to limit the risk of price gyration. However, IBHE volatility has been very low for 4 years. If you think interest rates will go down, bond ladders can lock in high rates in your portfolio for a few more years.

IBHE: 7.2% With 1 Year Bonds

iShares iBonds 2025 Term High Yield and Income ETF is a less risky high-yield bond fund that will terminate at the end of 2025. The fund follows the Bloomberg 2025 Term High Yield and Income Index and uses representative sampling to construct its portfolio. 7% yield with no duration risk is an interesting prospect, but we tell you why we are staying out.

The iShares iBonds 2025 Term High Yield and Income ETF is a fixed-term bond fund that seeks to track an index of high yield and income generating corporate bonds maturing in 2025. IBHE's portfolio consists of 173 bonds with an average yield to maturity of 8.2% and a 30-Day SEC Yield of 7.8%. With the current high interest rate environment and elevated default expectations, the forward return for investors buying IBHE today is only around 5%, making it less attractive compared to risk-free T-bills.