Friday, April 7, 2023

9 of the Best Bond ETFs to Buy in 2023

With the stock market in such turmoil for such a long time now, bonds have become a safe haven. With that in mind, I submit today's issue of U.S. News Invested.  


APRIL 7, 2023

U.S. News & World Report

Invested

Advice, rankings and stock market news for investors.

Happy Friday, investors! Tech stocks rise on labor data ahead of today's key jobs report, but Fedspeak keeps the throttle back.

Highlights of today's newsletter include our market insights plus these new articles:

9 of the Best Bond ETFs to Buy in 2023
7 Best Cheap Dividend Stocks to Buy Under $10
10 Best Low-Cost Index Funds to Buy
7 Commodity Stocks to Buy for Dividends, Inflation Hedging
Vanguard vs. Fidelity: Which Is Best for You?

Couple investing together at home

Historically, bonds have always acted as a kind of ballast for portfolios. During market crashes like those in 2008 and March 2020, bonds, especially high-quality ones like U.S. government Treasurys, soared in a "flight to safety."

About two-thirds of all net inflows into exchange-traded funds, or ETFs, in the first quarter of 2023 went to fixed-income funds, according to financial services firm VettaFi. ETFs are a popular choice in part because they are a low-cost way of getting around the lack of liquidity and complication of buying individual bond issues. Here are the nine best bond ETFs to buy right now:

Vanguard Total Bond Market ETF (ticker: BND). BND offers broad exposure to the U.S. bond market, tracking the Spliced Bloomberg U.S. Aggregate Float Adjusted Index to provide access to over 10,000 government, agency and investment-grade corporate bonds. The ETF currently provides a weighted-average yield to maturity – or the interest an investor earns when holding the bond until it matures – of 4.8%, along with an intermediate average duration of 6.5 years. BND's most notable feature is its low expense ratio of 0.03%, or about $3 annually per $10,000 investment.

iShares Core US Aggregate Bond ETF (AGG). A solid alternative to BND is AGG. This ETF tracks the Bloomberg US Aggregate Bond Index, which is often used as the benchmark of U.S. bond market performance. AGG is very popular and liquid, possessing high assets under management, or AUM, of $88 billion along with a 30-day average volume of over 7 million shares. AGG has a yield to maturity of 4.2% and a duration of 6.4 years. It also charges a low expense ratio of 0.03%.


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BOND ETFEXPENSE RATIO
Vanguard Total Bond Market ETF (ticker: BND)0.03%
iShares Core US Aggregate Bond ETF (AGG)0.03%
US Treasury 2 Year Note ETF (UTWO)0.15%
iShares U.S. Treasury Bond ETF (GOVT)0.05%
iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD)0.14%
SPDR Bloomberg High Yield Bond ETF (JNK)0.4%
Schwab US TIPS ETF (SCHP)0.04%
SPDR Bloomberg 1-3 Month T-Bill ETF (BIL)0.14%
Vanguard Tax-Exempt Bond ETF (VTEB)0.05%

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