Best ETFs For Trading: Medium-Term Bonds
These 23 funds are the cheapest of their type for in-and-out trades.
What does it cost to own the whole bond market for a brief period? This ranking tells you.
The table scores exchange-traded funds for their three-month holding costs, defined to include the effect of bid/ask spreads, expense ratios and cost offsets from securities lending (for the few funds that lend out their bonds). The medium-term category covers portfolios with average bond maturities between 3 and 9 years.
BlackRock’s iShares family has the winners in cost efficiency for speculative trades, in both the diversified and government-only categories. For every $10,000 invested, you will lose only a bit more than $2 to hold iShares Core U.S. Aggregate Bond (AGG) for three months. It would deliver a quick gain if interest rates reverse their recent trend and drift back down.
|3-month Holding Cost*|
|Diversified and corporate|
|CIU||iShares Intermediate Credit Bond||$1.97||A|
|AGG||iShares Core US Aggregate Bond||2.14||A+|
|BND||Vanguard Total Bond Market||2.55||A+|
|VCIT||Vanguard Interm-Term Corp Bd||2.99||A|
|SCHZ||Schwab US Aggregate Bond||3.03||A|
|VCSH||Vanguard Short-Term Corporate Bond||3.07||A|
|BIV||Vanguard Interm-Term Bond||3.98||A|
|LQD||iShares iBoxx $ Invmt Grade Corp Bd||4.05||A+|
|CRED||iShares US Credit Bond||4.35||B|
|SPAB||SPDR Portfolio Aggregate Bond||4.58||A|
|SPIB||SPDR Portfolio Interm Term Corp Bd||4.70||A|
|IUSB||iShares Core Total USD Bond Market||7.06||B|
|AGGY||WisdomTree Barclays YldEnh US AggtBd||8.26||B|
|BSCL||PowerShares BulletShrs 2021 Corp Bd||8.65||B|
|BSCM||PowerShares BulletShrs 2022 Corp Bd||8.68||B|
|VGIT||Vanguard Intmdt-Term Trs||3.41||A|
|SCHR||Schwab Intermediate-Term US Trs||3.97||A|
|VMBS||Vanguard Mortgage-Backed Secs||4.25||A|
|IEF||iShares 7-10 Year Treasury Bond||4.80||A+|
|IEI||iShares 3-7 Year Treasury Bond||4.86||A|
|ITE||SPDR Blmbg Barclays Interm Term Trs||5.95||B|
|GOVT||iShares US Treasury Bond||7.96||A|
*Cost of a $10,000 position held for three months. Reflects bid/ask spread, expense ratio and cost offset from securities lending.
Data sources: Morningstar, Bloomberg, fund distributors
Investing for the long haul is a different proposition, and different funds climb to the top. For rankings on ten-year holding costs, see Best ETFs for Investors: Medium-Term Bonds.
For links to short-term rankings in other categories, see Best ETFs for Trading.