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For diversifying risk in my personal depot I came across advice for this bond ETF: iShares € Ultrashort Bond UCITS ETF (https://www.ishares.com/ch/institutional/en/products/258114/ishares-euro-ultrashort-bond-ucits-etf#/)

While I am aware that interest rates are very low, I was expecting it to have a monthly dividend payment. But no dividend was paid since 2016. 1 year return is 0.21% and 3 year return is -0.32%.

I can't see any reason to invest in this ETF from an individual investor's perspective. Do I miss something?

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Based on the prospectus - it is supposed to distribute income, but there apparently has not been any income to distribute - probably because short-term government interest rates in EUR have been negative (not just "very low") for a while.

I can't see any reason to invest in this ETF from an individual investor's perspective

Longer-term investors might suspect that short-term rates will increase in the future, or that the credit risk inherent in the bond prices is overstated. If you want actual income-generating ETFs then look at longer-term or high-yield (read: credit risk) bond funds.

  • Thank you, I was only aware of some government bonds in the EUR zone being ≤0% and did not think that there could be no intersection of "investment grade" and "at least some return" for several years. – user640916 Jan 22 '20 at 20:19

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