Masters in Business · Thursday, July 2, 2026
Stephen Lately clarifies how bond ETFs in a ladder behave as maturity approaches. Unlike individual bonds that mature to cash, bonds within an ETF mature and are reinvested into short-term paper or cash. When the ETF itself liquidates, the cash is then transferred to the investor's brokerage account.
“What happens to those well, they eventually get reinvested into you know, cash accounts. In some cases they may get reinvested in very very short corporate paper as an example. But ultimately, as bonds keep maturing throughout that year, they're all going to be reinvested in cash. And so by the by the end you have cash in your account, what will happen or cash in the in the BONDI TIA portfolio. What will then happen is the BONDI TFD lists that it gets liquidated. That cash then hits your brokerage account. And that's that's basic.”