Megaphone icon ETF Database is now VettaFi. Read More >
ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • Entrepreneur ETF
    • Equity ETF
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Future ETFs
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Modern Alpha
    • Multi-Asset
    • Multi-Factor
    • Nasdaq Investment Intelligence
    • Portfolio Strategies
    • Retirement Income
    • Smart Beta
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Videos & Podcasts
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. 4 Bond ETFs That Earned Morningstar’s Gold Rating
News
Share

4 Bond ETFs That Earned Morningstar’s Gold Rating

Ben HernandezNov 20, 2019
2019-11-20

Investor appetite for bonds doesn’t seem to be letting up anytime soon and as the “recession” word keeps popping up in the financial markets, it will continue this way for quite some time. For investors looking to build a proper bond portfolio, they can look at ETFs that have earned Morningstar’s Gold rating.

“Be sure to start building your bond-fund portfolio with core, intermediate-term funds that give you a lot of diversification in a single holding,” said Morningstar director of personal finance Christine Benz.

  1. PIMCO Enhanced Short Maturity Active Exchange-Traded Fund (MINT A+): seeks maximum current income, consistent with preservation of capital and daily liquidity. “Fixed Income Instruments” include bonds, debt securities and other similar instruments issued by various U.S. and non-U.S. public- or private-sector entities. The average portfolio duration of this fund will vary based on PIMCO’s market forecasts and will normally not exceed one year.
  2. Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares (VTIP A-): seeks to track the performance of the Bloomberg Barclays U.S. Treasury Inflation-Protected Securities (TIPS) 0-5 Year Index. The index is a market-capitalization-weighted index that includes all inflation-protected public obligations issued by the U.S. Treasury with remaining maturities of less than 5 years. The manager attempts to replicate the target index by investing all, or substantially all, of its assets in the securities that make up the index, holding each security in approximately the same proportion as its weighting in the index.
  3. Schwab U.S. TIPS ETF (SCHP A): seeks to track as closely as possible, before fees and expenses, the total return of the Bloomberg Barclays US Treasury Inflation-Linked Bond Index (Series-L). The index includes all publicly-issued U.S. Treasury Inflation-Protected Securities (TIPS) that have at least one year remaining to maturity, are rated investment grade and have $500 million or more of outstanding face value. The TIPS in the index must be denominated in U.S. dollars and must be fixed-rate and non-convertible.
  4. Fidelity Total Bond ETF (FBND B-): seeks a high level of current income. It uses the Bloomberg Barclays U.S. Universal Bond Index as a guide in allocating assets across the investment-grade, high yield, and emerging market asset classes. The fund invests up to 20% of assets in lower-quality debt securities. It is managed to have similar overall interest rate risk to the index.

The fund on the list that’s suitable for the largest swath of investors is likely Fidelity Total Bond ETF (FBND), writes Susan Dziubinski of Morningstar.

“Why? Because when it comes to bond investing, intermediate-term funds are the starting point—and for many, the ending point, too,” she said.

Two of the other Gold-rated funds on the Morningstar list—Vanguard Short-Term Inflation-Protected Securities ETF (VTIP) and Schwab U.S. TIPS ETF (SCHP)—land in the inflation-protected bond category.

Either would make a good choice for those looking to add a bit of inflation protection to their portfolios—especially to a bond-heavy portfolio. TIPS funds are especially good choices for those in retirement, says Benz.

The final Gold-rated fund on the list—Pimco Enhanced Short Maturity Active ETF (MINT)—lands in the ultrashort bond category. ETFs in this group and the short-term bond categories are good choices for nearer-term goals.

“The team has the expertise to employ a wider range of tactics than many of its ultrashort bond Morningstar Category competitors,” explains director Miriam Sjoblom. “But while that can translate to a bit more risk at PIMCO Short-Term (PTSHX), manager Jerome Schneider follows a buttoned-up process here … [that] doesn’t use derivatives, won’t take currency risk, and sticks with investment-grade debt.”

Related: Bond ETFs for Those Focused On Resurgence in Inflation

Since it covers a wide array of debt, FBND is deal for a majority of investors.

“Besides investing in the typical investment-grade credit, mortgages, and U.S. Treasuries that constitute the fund’s Bloomberg Barclays U.S. Aggregate Bond Index benchmark, lead portfolio manager Ford O’Neil and his team may allocate up to 20% in non-investment-grade bonds, including high-yield and emerging-markets debt, when they find market valuations compelling,” explains analyst Emory Zink. “Relative to more conservatively positioned core-plus bond peers, this provides the fund with an edge in risk-on markets, but the flexibility may also invite more volatility.”

Watch: Where investors should turn if bond yields bottom


Content continues below advertisement

This article originally appeared on ETFTrends.com.

» Popular Pages

  • Tickers
  • Articles

Jun 24

As Inflation Rises, Try Equal Weighting Equity Holdings

Jun 24

Cybersecurity Investments Could be an Opportunity

Jun 24

Diversifying During Rate Hikes With a Real Estate ETF

Jun 24

Don't Ever Bet Against the S&P 500

Jun 24

Have We Reached Rock Bottom?

Jun 24

Coinbase Poised to Launch Derivatives Product

Jun 24

Any Time is the Right Time to Begin Investing

Jun 24

American Century’s Sandra Testani

Jun 24

Exxon Demands Higher Carbon Tax: This Fund Benefits

Jun 24

Gender Matters When it Comes to Retirement Planning

QQQ

Invesco QQQ Trust

SPY

SPDR S&P 500 ETF Trust

VOO

Vanguard S&P 500 ETF

ARKK

ARK Innovation ETF

VTI

Vanguard Total Stock Market...

XLE

Energy Select Sector SPDR...

VYM

Vanguard High Dividend Yield...

IVV

iShares Core S&P 500 ETF

SCHD

Schwab US Dividend Equity ETF...

XLK

Technology Select Sector SPDR...


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
  • Mission Statement
  • Press
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © ETF Flows LLC
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X