15 Best Bond ETF: Long and Short-Term Bonds, High Yield in 2021

The Bond Exchange Traded Funds (ETFs) provide you as an investor with an opportunity to gain wider exposure to the bonds market. With the bond ETFs, you can easily trade and have confidence in bonds, and they will always assure you transparency.

As an investor, you need to take critical interests in the liquidity of an investment you make, and in this case, bond ETFs are more liquid than individual bonds and mutual funds.

Contents

1. What is a Bond ETF? 

2. What Kinds of Bond ETFs Are There? 

Sovereign Bond ETFs- 

Corporate Bond ETFs 

Municipal Bond ETFs 

Broad-Market Bond ETFs 

3. Best Recommended Bond ETFs to Buy 

Treasuries ETF 

iShares 1-3 Year Treasury ETF 

Corporate Bond ETF 

Muni Bonds 

Total Bond Market ETFs 

4. Other Bond ETFs 

Long Term Bond ETF 

Short Term Bond ETF 

 

1. What is a Bond ETF?

As an investor, you need to fully understand the basics of Bond ETFs and one of them being the meaning of Bond ETFs. They simply refer to Exchange Traded Funds that you can use to exclusively invest in bonds. They function as bond mutual funds since they use different particular strategies to hold funds.

To promote market stability, the bond ETFs are passively managed and traded by the addition of liquidity and transparency.

2. What Kinds of Bond ETFs Are There?

Generally, the bond ETFs fall into one of the four main categories. They include

Sovereign Bond ETFs-

These bond ETFs follows up the debt issued by the sovereign nations’ governments. They include the International Bond ETFs, Mortgage-Backed securities ETFs, U.S. Treasury ETFs, and the Treasury Inflation-Protected Securities ETFs.

Corporate Bond ETFs

This category of bond ETFs mainly deals with companies and holds the bonds issued by the specific companies to raise capital and finance the company’s operations. The corporate bond ETFs comes in different flavors, including Investment grade ETFs, Junk Bond ETFs, Senior Bank Loan ETFs, Hybrid Security ETFs, and the $5.4 billion PowerShares Senior Loan ETF.

Municipal Bond ETFs

The Municipal Bond ETFs are a branch of the sovereign bond, which is a debt issued by the state, city, county, or even a town in the U.S that serves to fund projects such as roads and schools.

Broad-Market Bond ETFs

This bond ETF combines package sovereign, corporate, and municipal bond ETFs. They allow you to access these bond ETFs under one-stop.

3. Best Recommended Bond ETFs to Buy

 

Before focusing on the best bond ETFs to buy, it’s good for us to understand the importance of buying the bond ETFs.

The bond ETFs provides you with an immediate diversification of your portfolio and lower risks. They will also assist you in building your portfolio to the required levels.

Here are the best-recommended bonds ETFs you can invest in;

Treasuries ETF

The treasury ETFs invests basically in various lengths of U.S. Treasury notes. They are the most popular and safe bonds to invest in.

The treasuries ETFs include;

iShares 1-3 Year Treasury ETF

Symbol: SHY

1-Year Return: 1.9%

3-Year Return: 3.2%

5-Year Return: N/A

10-Year Return: N/A

Yield: 1.8%

Expense Ratio: 0.15

The iShares 1-3 Year Treasury ETF gives you as an investor exposure to the short end bonds in the maturity curve. It focuses on securities that can mature within three years.

If you need a treasury ETF that is light both on credit risk and interest rate risk, then iShares 1-3 Year Treasury ETF is the best for you. You can use iShares 1-3 Year Treasury ETF as a means to park assets in a volatile market.

Vanguard Short-Term Treasury ETF

 

This Treasury ETF seeks to have you enjoy a current income with the most latest price fluctuation.

Symbol: VGSH

1-Year Return: 1.8%

3-Year Return: 3.10%

5-Year Return: N/A

10-Year Return: N/A

Yield: 1.8%

Expense Ratio: 0.05%

Corporate Bond ETF

iShares Long-Term Corporate Bond ETF

 

Symbol: IGLB

1-Year Return: 3.41%

1-Year Yield: 9.6%

Expense Ratio: 0.06%

IGLB is the best corporate long-term ETF that you can invest in if you need a long-term investment of more than ten years. It has holdings that consist of over 2500 corporate bonds that are anchored in numerous companies.

SPDR Portfolio Long-Term Corporate Bond ETF

Symbol: SPLB

1-Year Return: 3.25%

1-Year Yield: 9.9%

Expense Ratio: 0.07%

This is a bond ETF that has its investments in the U.S. investment-grade corporate bonds that gives you an investment period of over ten years. SPLB has over 2100 holdings, with the top three investors being the bonds of GE Capital International Funding Co., the international funding of GE, and the CVS Health Corporation.

Vanguard Long-Term Corporate Bond ETF

Symbol: VCLT

1-Year Return: 3.39%

1-Year Yield: 9.5%

Expense Ratio: 0.05%

This bond ETF invests in grade corporate bonds on the long end in the maturity spectrum, thus making it the best for you as an investor looking for long-term investment.

VCLT further tracks the Barclays U.S. 10+ Year corporate index that assures you medium credit risk and a reasonable amount of interest rate risk.

Its top three holdings include the Computer Technology Company, Oracle Corp, and the GE Capital International Funding.

Muni Bonds

The Muni Bonds provide investors with a high tax bracket.

American High-Income Municipal Bond Fund

Symbol: AMHIX

10-Year Return: 5.46%

Expense Ratio: 0.67%

This Muni Bond has been in existence since 1994 and has been providing investors with a top-level of current income.

The American High-Income Municipal Bond fund gives you diversified holdings distributed across high and low-rated bonds.

You will only be required to incur an expense ratio of 0.67% to invest in AMHIX.

T. Rowe Price Maryland Tax-Free Bond Fund

Symbol: MDXBX

10-Year Return: 3.78%

Expense Ratio: 0.48%

T. Rowe Price Maryland Tax-Free Bond Fund was put forward in 1987 with the aim of providing a high-income rate to fund its investors.

Its fund managers invest a minimum of 80% of the T. Rowe Price Maryland Tax-Free Bond Fund's $2.5 billion assets in debt securities. This exempts it from the federal and Maryland state and personal income taxes.

If you are interested in debt securities and high-quality issues, then T. Rowe Price Maryland Tax-Free Bond Fund is the best ETF bond to trust.

Total Bond Market ETFs

Vanguard Long-Term Bond ETF

Symbol: BLV

10-Year Return: 7.11%

Expense Ratio: 0.07%

Vanguard Long-Term Bond ETF is the popular Bond ETF that offers you an investor exposure to the maturity curve's long end. It also focuses on giving you exposure to all bonds over ten year maturity period.

It is heavy on both credit risk and interest rate but assures you of a high expected return. You only incur an expense ratio of 0.07% to invest in Vanguard Long-Term Bond ETF.

PIMCO Total Return ETF

Symbol: BLV

10-Year Return: 7.11%

Expense Ratio: 0.73%

PIMCO Total Return ETF allows you access to one of the best and most successful bond fund managers. It contains a broad basket of investment-grade U.S debt securities when benchmarked against the Barclays U.S. aggregate index Bond.

First Trust Enhanced Short Maturity ETF

Symbol: AGG

10-Year Return: 7.11%

Expense Ratio: 0.05%

This bond ETF gives you broad exposure to investment-grade U.S. bonds if you need t build a long-term balanced portfolio.

AGC provides you with a one-stop potential of a fixed income exposure, but you need to do a close study on them.

4. Other Bond ETFs

Long Term Bond ETF

iShares Core Total USD Bond Market ETF

 

iShares Core Total USD Bond Market ETF is one of the long-term ETFs that gives you a wide exposure to potentially too high yielding bonds.

It is also a low-cost Bond ETF that guarantees a comprehensive involvement in a broad bond market. You will be required to incur an expense ratio of 0.06%.

Wisdom Tree Barclays Yield Enhanced U.S. Aggregate Bond Fund

Wisdom Tree Barclays Yield Enhanced U.S. Aggregate Bond Fund tracks the cost and yield performance of Bloomberg Barclays U.S. Aggregate Enhanced Yield Index before setting fees.

You can trust Wisdom Tree Barclays Yield Enhanced U.S. Aggregate Bond Fund as it seeks to enhance its income potential by sourcing opportunities from the Bloomberg Barclays.

Short Term Bond ETF

Vanguard Intermediate-Term Bond ETF

Vanguard Intermediate-Term Bond ETF exposes you to the investment-grade U.S. debt with maturities between five and ten years, which ranks it within the short term ETFs. Its holdings include corporate debt, treasuries, and even agency securities.

In case you are looking for a tool to fine-tune your duration of a fixed-income portfolio, then Vanguard Intermediate-Term Bond ETF is the best tool for you.

SPDR Double Line Total Return Tactical ETF

 

SPDR Double Line Total Return Tactical ETF is the best long term bond ETF that you can trust for maximum total return. It invests its entire assets heavily state street Double line total return tactical portfolio.

INVESCO CEF Income Composite ETF

Finally, INVESCO CEF Income Composite ETF also ranks as the best bond ETF you can trust. It offers you exposure to a basket of closed-end funds that you can invest in through the foxed assets.

Although the closed assets introduce you another risk factor, it still gives an opportunity to enhance the current returns of the invested funds. The juicy yield realized through this fund makes it the best fund to consider for your long-term investment.

As an investor, it's always good to widen your portfolio and your investment fields. Consider achieves part of these investment goals; you need to bond exchange Traded Funds.