9

When a bond matures, what happens to the corresponding bond ETF? It still keeps on going as if nothing has happened. How does this work? I guess there is some kind of rolling over happening here, but how exactly?

12

A bond ETF will hold a basket of many, many bonds. As individual bonds mature, the fund reinvests in newer ones. These can be newly issued bonds or existing ones in the secondary market with time till maturity.

  • 4
    I would add that many bond etfs sell all their bonds well before maturity avoiding this. – rhaskett Jan 28 '15 at 23:00

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.