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Baby bonds is a term used for bonds that are issued in $1,000 denominations and often trade on exchanges. These are popular with retail investors. Why would you want to limit the OEFs, ETFs, or CEFs to such baby bonds only? Edited for clarity & typos.
Baby bonds is a term used for bonds are issued in $1,000 denominations and often trade. These are popular with retail investors. Why would you want to limit OEFs, ETFs, or ETFs to such baby bonds only?
Baby bonds (I believe) are bonds that are traded on exchanges in denominations less than $1,000….usually $25, although some are $50 and some are $100 (or other par prices). There are also preferred stocks that trade similarly (in denominations, exchanges, etc.), but baby bonds are higher in the capital stack, have call and due/maturity dates, and generally trade more muted (lower volatility) than preferred stock (which are closer to equity—or the bottom—of the capital stack).
I know trading individual baby bonds (or any other security) can be a PITA, but if you spend some time looking at individual baby bonds, you can get yields easily of 6% or higher (usually called stripped or current yield), with built in capital gains if buying under par, that adds to the return (usually called yield to maturity or yield to call).
PIMCO also has a fund that invests in baby bonds and preferreds….PFANX is the A share version of it.
I have invested in several individual preferreds and baby bonds, so am happy to answer any more questions; usually ETF or mutual fund versions that hold these funds have several limitations (usually liquidity and excessive exposure to financial companies because these are the most likely to issue these securities) that hurt longer term returns.
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Edited for clarity & typos.
https://www.holbrookfunds.com/_files/ugd/0b9fcd_f222282487f94c3490f5c24fb5daa6e6.pdf
I know trading individual baby bonds (or any other security) can be a PITA, but if you spend some time looking at individual baby bonds, you can get yields easily of 6% or higher (usually called stripped or current yield), with built in capital gains if buying under par, that adds to the return (usually called yield to maturity or yield to call).
PIMCO also has a fund that invests in baby bonds and preferreds….PFANX is the A share version of it.
I have invested in several individual preferreds and baby bonds, so am happy to answer any more questions; usually ETF or mutual fund versions that hold these funds have several limitations (usually liquidity and excessive exposure to financial companies because these are the most likely to issue these securities) that hurt longer term returns.