"It's a diversified portfolio, so advisors don't own a large position in anything when investing in Guggenheim BulletShares," says Timothy Strauts, mutual fund analyst with Morningstar. "Advisors can use them to create bond ladders so that as one matures in a particular year, a 2019 bond can be purchased to extend the investment."
A typical bond ETF has a target maturity range, never matures and will always rollover the bond. Under a defined-maturity ETF strategy, money is returned to shareholders at the end of the bond's term. Other defined maturity ETFs on the market include the iShares S&P AMT-Free Municipal Series fund with maturity dates each year from 2012 to 2017.
"If you have a liability in 2018, you can put money away in the Guggenheim BulletShares 2018 Corporate Bond ETF knowing that it will mature in its target year and that you will get your money back," said Strauts.