iShares Core U.S. Aggregate Bond ETF
Price
$97.83
YTD
+3.20%
Expense
0.03%
Yield
4.35%
🇺🇸 United States
Best Corporate Bond ETFs
Top ETFs for investment-grade corporate bonds offering higher yields than Treasuries with moderate risk.
Corporate Bonds: Higher Yield, Moderate Risk
Corporate bond ETFs invest in debt issued by companies rather than governments. Investment-grade corporate bonds offer higher yields than comparable Treasuries in exchange for credit risk — the possibility that the issuing company could default. The best corporate bond ETFs diversify across hundreds of issuers to minimize this risk.
🏆 Winner — #1 pick
iShares iBoxx Investment Grade Corporate Bond ETF
Price
$106.73
YTD
—
Expense
0.14%
Yield
4.30%
Vanguard Intermediate-Term Corporate Bond ETF
Price
$81.44
YTD
—
Expense
0.04%
Yield
4.00%
Frequently asked questions
What are corporate bond ETFs?
Corporate bond ETFs are funds that invest in debt issued by companies, offering higher yields than government bonds but with added credit risk.
Why do corporate bonds offer higher yields than Treasuries?
They compensate investors for taking on credit risk, meaning the possibility that a company may default on its debt.
What is credit risk in corporate bond investing?
Credit risk is the chance that a bond issuer may fail to make interest or principal payments.
What is the top corporate bond ETF mentioned?
The top pick is AGG (iShares Core U.S. Aggregate Bond ETF) by BlackRock.
What does AGG invest in?
AGG tracks the Bloomberg U.S. Aggregate Bond Index, covering the entire U.S. investment-grade bond market, including corporate and government bonds.
What is the current price of AGG?
The price of AGG is approximately $99.23.
What is the expense ratio of AGG?
AGG has a very low expense ratio of 0.03%.
What yield does AGG offer?
AGG offers a yield of about 4.35%.
Why is AGG considered a strong ETF?
It provides broad diversification across the U.S. bond market with low costs and balanced risk exposure.
What is the runner-up corporate bond ETF?
The runner-up is LQD (iShares iBoxx Investment Grade Corporate Bond ETF).
What does LQD focus on?
LQD invests in investment-grade corporate bonds issued by large U.S. companies.
What is the yield of LQD?
LQD offers a yield of approximately 4.3%.
What is the expense ratio of LQD?
LQD has an expense ratio of 0.14%.
What is the AUM of LQD?
LQD manages around $34 billion in assets under management.
What is VCIT and how does it compare?
VCIT (Vanguard Intermediate-Term Corporate Bond ETF) focuses on intermediate-term corporate bonds, offering a balance between yield and interest rate risk.
What yield does VCIT provide?
VCIT offers a yield of approximately 4%.
What is the expense ratio of VCIT?
VCIT has a low expense ratio of 0.04%.
What is the advantage of intermediate-term corporate bond ETFs?
They offer a middle ground between higher yields and lower interest rate sensitivity compared to long-term bonds.
Who manages AGG and LQD ETFs?
Both AGG and LQD are managed by BlackRock under its iShares brand.
Who manages VCIT ETF?
VCIT is managed by Vanguard.
Are corporate bond ETFs suitable for income investors?
Yes, they are popular among income investors due to their relatively higher yields compared to government bonds.
How do corporate bond ETFs reduce risk?
They diversify across hundreds of issuers, reducing the impact of any single company default.
What happens to corporate bond ETFs during economic downturns?
They may decline in value as credit risk rises, but high-quality investment-grade bonds tend to be more resilient.
What role do corporate bond ETFs play in a portfolio?
They provide income, diversification, and moderate risk exposure compared to equities and government bonds.