The bigger point you (and I use the royal you rather than you specifically) are missing is that the value of a bond at any point in time is exactly it's current net present value. So let's look at a scenario to explain. You hold a 4% 10 year zero coupon bond. The day after you buy it, interest rates go 5%. The price of the bond will fall because of that, let's say it falls by 8%. At this point, you have a choice: A. You can sell for an 8% loss and immediately reinvest in another 10 year bond at 5%. B. You can hold to maturity and get your previous 4% for 10 years. At the end of 10 years, you will have exactly the same amount of money regardless of if you choose option A or B. If you choose option A you will have less money invested at a higher interest rate. If you choose option B you will have more money invested at a lower interest rate. The end result will be the same. Exactly the same. So forget about a difference between holding to maturity vs. an ETF. There isn't one.