In this article, we discuss the 5 best bond ETFs to buy now. If you want to see more ETFs that could make for safe investments, click 10 Best Bond ETFs to Buy Now.
5. VanEck Emerging Markets High Yield Bond ETF (NYSE:HYEM)
The VanEck Emerging Markets High Yield Bond ETF (NYSE:HYEM) aims to replicate the price and yield performance of the ICE BofA Diversified High Yield US Emerging Markets Corporate Plus Index. The underlying index consists of U.S. dollar-denominated, below investment grade bonds issued by non-sovereign emerging markets. The fund was established in 2012, and has total net assets equal to $752.4 million. The VanEck Emerging Markets High Yield Bond ETF (NYSE:HYEM) charges a net expense ratio of 0.40% and has 664 holdings in its portfolio. The ETF offers a 30-day SEC yield of 9.42% and distributes dividends monthly.
Corporate bonds issued by Industrial & Commercial Bank of China Ltd. (OTC:IDCBY) make up 1.80% of the VanEck Emerging Markets High Yield Bond ETF (NYSE:HYEM)’s total holdings. These bonds have a coupon rate of 3.2% and will mature on April 24, 2072. The ETF invests primarily in the financials, basic materials, energy, industrials, and utilities sectors of China, Brazil, Mexico, Turkey, and Colombia, among other countries.
4. Vanguard Short-Term Inflation-Protected Securities Index Fund (NASDAQ:VTIP)
The Vanguard Short-Term Inflation-Protected Securities Index Fund (NASDAQ:VTIP) seeks to track an index that measures the performance of inflation-protected U.S. Treasury bonds with a remaining maturity of less than five years. The returns of the Vanguard Short-Term Inflation-Protected Securities Index Fund (NASDAQ:VTIP) are less volatile compared to the longer-term TIPS funds, and can protect investors from unexpected inflation. As of January 31, the fund’s expense ratio came in at 0.04%. The Vanguard Short-Term Inflation-Protected Securities Index Fund (NASDAQ:VTIP) has 21 bonds in its portfolio, with net assets totaling $61.70 billion. The ETF invests primarily in treasury or agency-backed bonds.
United States Treasury Inflation Indexed Bonds make up about 7% of the total portfolio of the Vanguard Short-Term Inflation-Protected Securities Index Fund (NASDAQ:VTIP). These bonds are expected to mature on January 15, 2023, with a coupon rate of 0.125%.
3. iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT)
The iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) exposes investors to long-term U.S. Treasury bonds, with maturities exceeding 20 years. The ETF tracks the price and yield performance of the ICE US Treasury 20+ Year Index, with total net assets amounting to $20.7 billion. With a monthly dividend distribution frequency, the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) offers a 30-day SEC yield of 3.22%. It has a fairly concentrated portfolio, with only 32 holdings as of July 11. The fund charges an expense ratio of 0.15%. United States treasury bonds represent 99.99% of the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT)’s total portfolio.
2. iShares TIPS Bond ETF (NYSE:TIP)
The iShares TIPS Bond ETF (NYSE:TIP) seeks to tracked the investment results of the Bloomberg U.S. Treasury Inflation Protected Securities (TIPS) Index. The ETF aims to protect investors against intermediate-term inflation, as the value of TIPS rises with inflation. The iShares TIPS Bond ETF (NYSE:TIP) was established in December 2003, and as of July 11, the fund has total net assets of about $31 billion. The 30-day SEC yield stands at 9.42% and the fund distributes dividends on a monthly basis. The portfolio consists of 49 holdings. The iShares TIPS Bond ETF (NYSE:TIP) charges an expense ratio of 0.19% and 99.16% of its portfolio is dominated by AAA-rated United States Treasury bonds. The latest dividend of $0.56 was paid to shareholders on July 8.
1. Fidelity Total Bond ETF (NYSE:FBND)
The Fidelity Total Bond ETF (NYSE:FBND) is an actively managed exchange-traded fund that invests in debt securities of all kinds. The portfolio comprises 1,959 holdings, with 23.49% short-term, 35.34% intermediate-term, and 38.89% long-term bonds. The Fidelity Total Bond ETF (NYSE:FBND) primarily invests in treasury, agency, corporate, and mortgage bonds. The fund was established in October 2014, and as of June 30, its total net assets amount to $2.20 billion. The Fidelity Total Bond ETF (NYSE:FBND) charges an expense ratio of 0.36% and delivers a 30-day SEC yield of 3.82%. A monthly dividend of $0.113 was paid to shareholders on July 1.
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