Corporate Bonds
Investors love corporate bonds because of their security. They are the middle ground between treasury notes and junk bonds: They are only slightly less secure than treasury notes, but can pay significantly more. ETF’s that seek to mimic the performance of corporate bonds allow investors to receive the same benefits, but don’t require the large expenditures that corporate bonds do. One of the drawbacks associated with these ETF’s is that the investor doesn’t always know which companies’ bonds are held in the ETF. Still, they tend to be highly diversified ETF’s whose performance is depending on companies with strong credit ratings and reputations.
