Taxable investment-grade bond ETFs

I am looking for an investment-grade bond ETF to round up my portfolio. The criteria I used include the following:

  • Low expenses : the lower the expense ratio, the better.
  • Diversification : for investment grade bond funds, generally the more holdings, the better.
  • Amount of assets & trading volume : generally the larger the better (improves liquidity, smaller trading spreads).
  • Duration : duration is a measure of the sensitivity of the fund price to interest rate changes. At this juncture in the economy, I would prefer not to go too long on duration.
  • Credit quality : no junk bond fund for me.

The ETFs that I narrowed down to include BSV, CSJ, AGG, BIV, CIU and LQD. These are listed in the table below:

From the look of it, I would probably go with CSJ,  the iShares Barclays 1-3 year credit bond ETF.

1 Comment

  1. John

    Are these corporate or federal bonds? And are they better after tax wise vs. municipal bonds?

    Reply

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