Maturity

Unlike equities, most fixed income instruments have a limited life. The maturity of a fixed income instrument is the date the final repayment will be made. After this final repayment, all due interest and principal are paid to the holder. Even though most Fixed Income ETFs do not mature, the maturity of the underlying bonds has an impact on the fund yield and therefore performance. 

Maturity Explained

Bond maturity is classified across maturity ranges. For example, an ETF classified as “1-5 years” will be only composed of bonds that mature between 1 and 5 years from now. Without any lower or upper maturity bounds, ETFs are classified as “Less than X years” or “More than X years” respectively. 

When the ETF does not apply any maturity restriction, it is classified as “All Maturities”.

“Mixed Maturities” is a particular category for ETFs that comprise instruments with different maturity ranges. For example, an ETF composed of bonds with both maturities of 1 to 3 years and maturities of 10 years will fit into this category.

The following list gives a clear view of maturity classifications:

Less than a year

For ETFs including instruments with maturities of less than a year.

Less than 5 years

For ETFs including instruments with maturities of less than 5 years.

Less than 10 years

For ETFs including instruments with maturities of less than 10 years.

1-5 years

For ETFs including instruments with maturities between 1 and 5 years.

5-10 years

For ETFs including instruments with maturities between 5 and 10 years.

1-10 years

For ETFs including instruments with maturities between 1 and 10 years.

More than 5 years

For ETFs including instruments with maturities of more than 5 years.

More than 10 years

For ETFs including instruments with maturities of more than 10 years.

At least a year

For ETFs including instruments with maturities of at least 1 year.

All maturities

For ETFs that do not apply any maturity restriction to their investment selection process. 

Mixed maturities

For ETFs that comprise instruments with different non-overlapping maturity ranges.