iSHARES iBONDS ETFs

iBonds ETFs (Exchange Traded Funds) are an innovative suite of bond funds that have a fixed maturity date. They hold a diversified portfolio of bonds with similar maturity dates, are designed to provide regular income payments and distribute a final payment in their stated maturity year. For more information on the final payment see the below section on ‘when the iBonds ETF matures’.

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

The unique features of iBonds ETFs can help you easily access bond markets, pick points in time or could even match expected cash flow needs in the future.

• Diversified access to bond markets - iBonds trade on an exchange, giving all investors access to bond markets, traditionally a market difficult to navigate, while maintaining diversification.
• Pick points in time - iBonds ETFs offer diversified exposure to bonds that mature in the calendar year of the fund's name, allowing you to target specific points on the yield curve.
• Match expected cash flows - iBonds ETFs mature at a specific date. So, investors could expect a final payment at maturity, which could help fund life stage planning, such as buying a car or a house, college tuition or retirement.

At time of purchase of the iBonds ETF

When you are ready to purchase an iBonds ETF, we have tools to help you understand the estimated net acquisition yield of the fund. The estimated net acquisition yield provides a yield estimate, net of fees and market price impact, if the fund is held to maturity.

On each iBonds ETFs product page, the Estimated Net Acquisition Yield Calculator can provide a yield estimate if you enter a projected market price.

During the holding period of an iBonds ETF

iBonds ETFs are designed to provide a yield-to-maturity ("YTM") profile comparable to that of the underlying bond portfolio. The funds seek to preserve an investor’s anticipated yield-to-maturity through a combination of regular distributions and a final end-date distribution.

When the iBonds ETF matures

iBonds ETFs terminate in December of the year in the fund’s name. In the final months when the bonds in the portfolio mature (maturity transition period), the fund's holdings transition to cash and cash equivalents. After all the bonds in the portfolio mature, the ETF is closed and shareholders receive a final payment. 

The final payment that an investor will receive includes the initial investment (principal amount) along with any income generated by the ETF, such as interest payments from the underlying bonds. The fund’s liabilities such as fees and accrued expenses will get deducted from this final payment.