Furthermore, the lower interest rates that are typical of a recessionary environment are offset if a portfolio has a fair mix of bonds and equities. ETFs offer investors an easy way to access a few corporate bonds in one shot rather than shopping around for individual bonds. [Investors Flocking to Emerging Market, High-Yield ETFs]
Corporate bond ETFs include iShares GS InvesTop Corporate Bond Fund (NYSEArca: LQD), a fund that owns corporate bonds with intermediate-term durations. The yield is about 4% currently.
For a riskier bet, but a nearly 7% yield reward, the iBoxx Investment Grade Corporate Bond Fund (NYSEArca: HYG) offers investors the largest portfolio of high yield bonds.
Tisha Guerrero contributed to this article.