What are the advantages of investing in ETF bonds?

The liquidity and transparency of an ETF offer advantages over a passively held bond ladder. Bond ETFs offer instant diversification and a constant duration, which means an investor needs to make only one trade to get a fixed-income portfolio up and running. A bond ladder, which requires buying individual bonds, does not offer this luxury.

What are the risks associated with investing in ETF bonds?

For one thing, an investor's initial investment is at greater risk in an ETF than an individual bond. Since a bond ETF never matures, there isn't a guarantee the principal will be repaid in full. Furthermore, when interest rates rise, it tends to harm the price of the ETF, like an individual bond.

How can I find the best bond ETFs?

Bond ETFs can be found in the following asset classes: The largest Bond ETF is the Vanguard Total Bond Market ETF BND with $85.16B in assets. In the last trailing year, the best-performing Bond ETF was TTT at 134.04%. The most recent ETF launched in the Bond space was the Virtus Stone Harbor Emerging Markets High Yield Bond ETF VEMY on 12/12/22.