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Bear,

The problem with any fund, mutual fund or ETF, is they are subject to market pressure, hence pricing pressure if people flee that fund. People do that in a hard downturn.

Bonds can be used in a ladder also. You just have to get the timing figured out. One benefit is the treasuries can be sold early on the open market without penalty, however with the attendant price risk. Holding to term will give you the principal back.

When starting a bond ladder, you may need to get CD's to initially fill some of the shorter terms if you can't find the proper bonds. When they mature, buy the 5 year treasury with that money.

Does that help you?

Gene
All holdings and some stats on my profile page
http://my.fool.com/profile/gdett2/info.aspx
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