The iShares brand has a plethora of bond-focused ETFs to consider and a place to start is looking at which funds are receiving the highest inflows so far this year.
Exposure to core bonds
Getting basic bond exposure always has a place in a portfolio. At the top of the iShares YTD fund stream is the iShares Core Total US Bond Market ETF (IUSB).
The IUSB seeks to track the investment results of the Bloomberg Barclays US Universal Index. The fund will generally invest most of its assets in the securities that make up the index and may also invest in certain futures, options and swaps, cash and cash equivalents, including shares of money market UCITS advised by BFA or its affiliates, as well as in securities not included in the Underlying Index, but which BFA believes will help the Fund track the Underlying Index.
Then comes the iShares Core US Aggregate Bond ETF (AGG), which has been the fund of choice for investors who want this core bond exposure since 2003. AGG eeks to track the investment results of the Bloomberg Barclays US Aggregate Bond Index.
The index measures the performance of the overall US investment grade bond market. The fund generally invests at least 90% of its net assets in securities that make up its underlying index and in investments whose economic characteristics are substantially identical to the economic characteristics of the securities that make up its underlying index.
Fallen and short-term angels
Obtaining exposure to short-term corporate bonds gives investors the opportunity to earn returns, but minimizes duration risk. For investors opting for the short end of the yield curve, there is the iShares Short-Term Corporate Bond ETF (IGSB).
With its low expense ratio of 0.06%, IGSB seeks to track the investment results of the ICE BofA 1-5 Year US Corporate Index. The Underlying Index measures the performance of investment grade corporate bonds of US and non-US issuers that are US dollar denominated and publicly issued in the US domestic market and have a remaining maturity of one or more. year and less than five years.
Finally, there is the iShares Fallen Angels USD Bond ETF (FALN). The fund seeks to track the investment results of the Bloomberg Barclays US High Yield Fallen Angel 3% Capped Index, composed of high yield US dollar denominated corporate bonds that were previously rated investment grade.
The fund will generally invest at least 90% of its assets in the securities that make up the index and may invest up to 10% of its assets in certain futures contracts, options and swaps, cash and cash equivalents. The index is designed to reflect the performance of high yield US dollar denominated corporate bonds that were previously rated investment grade.
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