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In 2024, conservative investors are seeking stability and income amidst economic uncertainties. Bond ETFs (Exchange-Traded Funds) offer a diversified and cost-effective way to invest in bonds, providing a steady income stream and potential capital appreciation. Here are some of the top bond ETFs for conservative investors to consider in 2024: a.
Total Assets: US$120.87 billion b. YTD Performance: 4.
87% c. 1-Year Performance: 11.65% d.
Dividend Yield: 3.42% e. Expense Ratio (ER): 0.
03% f. Holdings: 11,960 g. P/E Ratio: N/A h.
Beta: 0.12 i. Category: Total Bond Market j.
Inception: 2003-09-22 The iShares Core US Aggregate Bond ETF (AGG) is a popular choice among investors seeking broad exposure to the US investment-grade bond market. This ETF aims to track the performance of the Bloomberg US Aggregate Bond Index. This includes a diverse range of bonds such as US Treasuries , government-related and corporate securities, mortgage-backed securities (MBS), asset-backed securities (ABS), and commercial mortgage-backed securities (CMBS).
AGG is known for its low expense ratio of 0.03%, making it a cost-effective option for investors. The fund's portfolio consists of fixed-rate, taxable bonds with at least one year until maturity, ensuring a stable income stream.
The market-value weighting of the index emphasizes the most liquid issues, providing a balanced and efficient investment approach. One of the key benefits of AGG is its ability to provide diversification and reduce risk in an investment portfolio . By including a wide array of bond types, AGG helps investors achieve a stable return while mitigating the impact of market volatility a.
Total Assets: US$118.72 billion b. YTD Performance: 4.
91% c. 1-Year Performance: 11.58% d.
Dividend Yield: 3.37% e. Expense Ratio (ER): 0.
03% f. Holdings: 17,785 g. P/E Ratio: N/A h.
Beta: 0.14 i. Category: Total Bond Market j.
Inception: 2007-04-03 The Vanguard Total Bond Market ETF (BND) is a highly regarded option for investors seeking comprehensive exposure to the US bond market. This ETF aims to track the performance of the Bloomberg US Aggregate Float Adjusted Index. The bond ETF includes a wide array of US investment-grade bonds such as US Treasuries, government-related and corporate securities, mortgage-backed securities (MBS), asset-backed securities (ABS), and commercial mortgage-backed securities (CMBS).
BND is known for its low expense ratio of 0.03%, making it an attractive and cost-effective choice for investors. The fund's portfolio is designed to provide broad exposure to the taxable investment-grade US dollar-denominated bond market, excluding inflation-protected and tax-exempt bonds.
This broad diversification helps mitigate risk and provides a stable income stream. a. Total Assets: US$61.
39 billion b. YTD Performance: 2.42% c.
1-Year Performance: -10.10% d. Dividend Yield: 3.
67% e. Expense Ratio (ER): 0.15% f.
Holdings: 47 g. P/E Ratio: N/A h. Beta: 0.
06 i. Category: Government Bonds j. Inception: 2002-07-22 The iShares 20+ Year Treasury Bond ETF (TLT) is a prominent choice for investors seeking exposure to long-term US Treasury bonds .
This ETF aims to track the investment results of an index composed of US Treasury bonds with remaining maturities greater than twenty years. TLT provides targeted access to the long-term segment of the US Treasury market, making it a valuable tool for managing interest rate risk and achieving portfolio diversification. TLT is known for its relatively low expense ratio of 0.
15%, which makes it a cost-effective option for investors. The fund's portfolio includes US Treasury securities that are considered to be among the safest investments. This offers a high degree of credit quality and liquidity.
This makes TLT an attractive option for conservative investors looking to preserve capital while earning a stable income. One of the key benefits of TLT is its ability to provide a hedge against economic downturns and market volatility. a.
Total Assets: US$60.28 billion b. YTD Performance: 3.
49% c. 1-Year Performance: 9.99% d.
Dividend Yield: 4.67% e. Expense Ratio (ER): 0.
07% f. Holdings: 6,746 g. P/E Ratio: N/A h.
Beta: 0.13 i. Category: Total Bond Market j.
Inception: 2013-06-04 The Vanguard Total International Bond ETF (BNDX) is designed to provide investors with broad exposure to global investment-grade bonds, excluding those from the United States. This ETF seeks to track the performance of the Bloomberg Global Aggregate ex-USD Float Adjusted RIC Capped Index (Hedged), which includes a diverse range of bonds from developed and emerging markets. BNDX employs currency hedging strategies to mitigate the impact of exchange rate fluctuations, ensuring more stable returns for investors.
The fund's portfolio is passively managed and includes government, corporate, and securitized bonds, offering a comprehensive approach to international fixed-income investing. With an expense ratio of just 0.07%, BNDX is a cost-effective option for those looking to diversify their bond holdings globally.
a. Total Assets: US$51.86 billion b.
YTD Performance: 6.37% c. 1-Year Performance: 14.
78% d. Dividend Yield: 4.05% e.
Expense Ratio (ER): 0.04% f. Holdings: 2,206 g.
P/E Ratio: N/A h. Beta: 0.27 i.
Category: Corporate Bonds j. Inception: 2009-11-19 The Vanguard Intermediate-Term Corporate Bond ETF (VCIT) is designed to provide investors with exposure to high-quality, investment-grade corporate bonds. This ETF seeks to track the performance of the Bloomberg U.
S. 5–10 Year Corporate Bond Index. This includes bonds with maturities ranging from five to ten years.
VCIT offers a diversified portfolio of intermediate-term corporate bonds, providing a balance between yield and interest rate risk. The fund follows a passively managed, index-sampling approach, ensuring that it closely mirrors the performance of the underlying index. With an expense ratio of just 0.
04%, VCIT is a cost-effective option for investors seeking moderate and sustainable income. Conservative investors have a variety of bond ETFs to choose from, each offering different levels of risk, yield, and expense ratios. By carefully selecting the right bond ETFs, investors can build resilience.
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