Fourth: Bond trading is often disrupted in stressful situations. Then the prices of ETFs sometimes fall more than those of the bonds in the portfolio. In the case of bond funds, the price reflects the price of the securities held in the portfolio.
Also read: How one expert views the high-yield bond market.
Fifth: Anyone who buys bond portfolios in order to achieve secure returns must take into account that the bonds in the funds or ETFs react very differently to interest rate changes and that interim price losses can therefore be high. There are ETFs that only relate to a specific term. Some choose bonds that will be repaid in three years at the latest. These periods are recognizable by name suffixes such as 1-3yr or 15-20 yr. “Yr” stands for the English “year”. The longer the term and interest rate sensitivity (duration) of a bond portfolio, the higher the price fluctuations.