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3 Ways ETF Investors Can Profit From Rising Rates

Benzinga.com
0 Comments| April 8, 2014

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Interest rates have stabilized significantly this year from their tremendous rise in 2013.

However, many investors believe that yields will ultimately move much higher.

The combination of the Federal Reserve tapering their asset purchase programs along with an eventual tightening of the Fed funds rate may significantly alter the landscape for fixed-income investors.

Fortunately, there are a variety of strategies that can be implemented to hedge exposure or even profit from the effects of rising interest rates.

One potential move to consider is shortening the average duration of your bond portfolio in order to reduce price sensitivity to interest rates. An ETF such as the Vanguard Short-Term Grade Corporate Bond Fund (NASDAQ: VCSH) holds a basket of investment grade debt of highly-rated companies with durations between one to three years.

This fund will not experience the same level of ...

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