Larry Berman CFA, CMT, CTA iShares 1-5 yr Government Bond ETF CLF-T BUY Oct 21, 2013

Yield is higher than bonds in it because of bonds farther out. This never matures. They have good diversity.

iShares 1-5 yr Ladder Corp Bond ETF (CBO-T) or iShares 1-5 yr Government Bond ETF (CLF-T)? He prefers the corporate one because the risk is very low and it is a very well diversified short-term portfolio. It will give you extra yield over time, over this one. This one will suit those who are risk adverse and willing to accept lower returns. If safety of capital is paramount, then he would suggest half-and-half.

Doesn’t think a 3.5% yield is sustainable in this environment. This is the sort of thing that will grind down the NAV. It is fine as a cash-park, but if it were him he would literally use cash instead.

Not a big fan of anything to do with the income space right now, because there is really nothing. Everything in the income space is pretty much a reverse beauty contest. Relatively conservative. Because of the five-year ladder, you are basically building a laddered portfolio without having to worry about liquidity issues and multiple trading. We are in a market right now where you are making virtually nothing in bonds, especially when you pay taxes and 2% inflation. You would probably be better off just keeping the money in the money market fund or a laddered GIC.

He prefers corporate bonds because they yield more than government bonds. Prices will probably continue to fall. You are getting a bigger yield payment than the yield to maturity on the bonds themselves. CBO-T would be the replacement for this ETF.