Target maturity bond ETFs have brought in $174 billion in net inflows since mid-May and Guggenheim Investments [profile] is taking advantage of investors' attraction to that market. It's releasing two BulletShares ETFs, the Guggenheim BulletShares 2021 Corporate Bond ETF and Guggenheim BulletShares 2022 Corporate Bond ETF.

Guggenheim currently has 16 fixed-income defined maturity corporate bond and high yield corporate bond ETFs. In an interview with MFWire, William Belden managing director and head of product development at Guggenheim Investments, explained why he thinks there is market opportunity for target maturity corporate bond ETFs.

In a rising interest rate environment, Belden said target maturity bonds are well-suited to investor uncertainty.

"The primary appeal of this is how people have uncertainty around interest rates They don't know how much they're going higher or how fast and they want to know how much, because with bonds, you like to have an awareness of where it will be, that's why people buy individual bonds," Belden said. "With the volatility around interest rates, they know prices will go down and you don't know when you're getting it back, so you want to mitigate the risk and by having a maturity date you do that. You still have confidence that value will return to the level of where the principal was."

Belden said target maturity funds will be a draw for people who want to save for retirement or college and need to have investments that allow a certain level of certainty.  

Correction: A prior version of this story linked to the wrong profile. The new ETFs are sponsored by Guggenheim Investments.

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