Exchange traded funds (ETFs) have different ways of generating returns for investors, and one way is through bond funds. They buy a relatively static pool of securities based on an index, and they’re attractive for the same reason other ETFs are: lower cost, because they lack an active manager.

Jack Colombo for Forbes shares his preferences in the world of ETF bond funds. Check out these bond ETFs:

• iShares iBoxx Investment Grade Corporate Bond Fund (LQD): Yields 5.64% with an expense ratio of 0.15%.

• iShares Lehman 7-10Yr Treasury Bond Fund (IEF): Yields 3.80% with an expense ratio of 0.15%; focuses on government bonds.

• Enhanced S&P 500 Covered Call Fund (BEO): This new idea for a bond fund generates income by buying an index of stocks and then writing call options on them.

• WisdomTree Total Dividend Fund (DTD): Pays 3.37% with an expense ratio of 0.28%; buys a portfolio of dividends paying common stocks and pay out the proceeds to shareholders.

In addition to Colombo’s picks, a few other bond funds we track are currently residing above their trend lines (200-day moving average):

• Vanguard Total Bond Market (BND)
• iShares Lehman 20+ Year Treasury Bond (TLT)
• iShares Lehman 3-7 Year Treasury Bond (IEI)
• iShares Lehman TIPS Bond (TIP)
• iShares Lehman 1-3 Year Treasury Bond (SHY)
• Vanguard Short-Term Bond (BSV)
• iShares Lehman Aggregate Bond (AGG)
• SPDR Lehman International Treasury Bond (BWX)
  

Tags: Bond ETFs, Dividend ETFs