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If you buy a target-maturity treasury bond ETF with positive yield to maturity, and if you hold until the liquidation date, the value you get on liquidation is guaranteed to be more than what you put in (in nominal terms). Example of target-maturity bond ETF that holds treasury bonds: iShares iBonds Dec 2029 Term Treasury ETF (NASDAQ: IBTJ).

Between now and the liquidation date, the value of the ETF might drop in response to increases in interest rates, but on the liquidation, the value won't less than what you paid for (in nominal terms). That's why you must hold to maturity for the non-loss guarantee to hold.

If you aren't restricted to the stock market, and you have access to the options market, you can look into principal-protected notes. These can be easily constructed during times of low market volatility by using a high-quality bond and a call option.

Flux
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  • 133