Best ETFs For Trading: Medium-Term Bonds


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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*
Liquidity Score
Ticker Exchange-traded fund
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
MBB iShares MBS 3.26 A
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.

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