Fixed Income ETFs

[Stanley117]

I was wondering if readers had any experience of using Bond, property or commodity ETFs to balance the equities in an ETF portfolio. I hold 'Vanguard all World ETF (VWRL) in a HL stocks ISA and I would like add some Fixed Income ETFs to temper the Risk/volatility of (VWRL) and ETFs seem to be a good way to do this.

Stan

[hiriskpaul]

A lot of the recent movements (nice movements!) you will have seen in VWRL recently are due to currency movements. In dollar terms VWRL is not particularly volatile. So if you want to dampen down currency induced volatility, that means investing in Sterling denominated bond funds. Vanguard have about the cheapest long dated gilts ETF (VGOV), but unfortunately not a Sterling denominated corporate bond ETF yet. iShares SLXX is a reasonable corporate bond ETF.

[ModernMicawber]

Agree with ETF recommendations above, but would add that in the particular portfolio I have (SIPP) where it is "uneconomic" to hold open ended funds I went for directly held gilts. (or in my case, "gilt", I only hold one issue, but I realise mine is a "fringe" view on this point!).

I think I pay £10 per deal, so sizes of £2K or so and upwards are economically viable.

[Lootman]

I don't generally have a lot of use for bonds and fixed income securities.

I do hold about 1% in a gilt ETF - iShares IGLT. It has a handy habit of going up when shares go down.

And as a cash substitute I use the iShares ultra-short ETF symbol ERNS, which I regard as a money-market fund surrrogate. I prefer holding cash with a broker in the foorm of a security rather than simply as a cash deposit with that broker.

[colin]

Deutsche Bank do some (I think) very useful international bond fund ETFs currency hedged to GBP.
Though make sure you understand the meaning and implications of terms such as duration and modified duration and the importance of matching duration to your holding period.