Evaluating Owning Bond ETFs

Typically, I have been buying fixed income bonds and CDs and hold until maturity to receive the original principal.  Of course, that leads to owning numerous CDs and bonds, and repurchasing when they mature.  Owning bond mutual funds or ETFs has the risk that the value decreases when interests rise and there is no guarantee of recover the original cost by holding to maturity.

The main reason I am going to bond ETFs is for simplification.   Bond ETFs make monthly interest payment and take care of the reinvestment process when bonds mature.    Hopefully, even with bond volatility and the the fluctuation of ETF values, I will still receive approximately the same amount of interest each month towards my monthly retirement "paycheck."

Here's what I've been doing:

Taxable accounts

I've been purchasing municipal bond ETFs: SCMB, VTEB, and VCRM.    SCMB has been the biggest purchase.   

Non taxable accounts -IRAs

I've been purchasing taxable bond ETFs:  BND and SCHZ.

I've only owned the ETFs about a week.  So far the municipal bond ETFs have been fairly stable.  The taxable bond ETFs have declined slightly, about 0.2%

Analysis

My main criteria is if we get consistent payment over time and the impact of interest changes on the amount.  I've only received on partial dividend since I bought shares before and after the ex-dividend date of the 1st.  Next month, I will get a better idea of the monthly payment amount to expect from these bond ETFs.

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This is not financial, fixed income, nor investment advice. Please consult a professional advisor.

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