How to Invest in a Bond ETF

An "ETF" is an "Exchange Traded Fund". They are traded on the major markets like the NYSE and Nasdaq but do not represent the traditional shares of stocks that are usually traded on such markets. There is much to learn about bond ETFs; read on to find out more.

Difficulty: Easy

Instructions

Things You'll Need:

• An online trading account with a major broker that handles the stock exchanges

1. Bond ETFs are funds that track bonds. Government bonds can be safe havens as long as the government's financial status is solid. One advantage of buying a bond ETF is that you don't have to put all your faith in one government or one currency or one type of bond.

2. Go to a major search engine and type "list of bond ETFs". From there you will see a great array of dozens, if not hundreds, of bond ETFs. Read through the list of bond ETFs carefully so you can make a well-researched decision of which bond ETF might be best for you.

3. Keep in mind that the company that sponsors the Bond ETF will extract a miniscule percentage for management expenses. This is generally less than one percent and won't affect your earnings too much.

4. Since you trade a Bond ETF just like you do another stock, you need to be conscious that there will be a service charge from your brokerage for buying and selling the Bond ETF.

Resources

• List of Bond ETFs