Investors can also hold onto individual bonds until maturity to avoid realizing a short-term loss as they would regain the initial principal once the security matures plus interest payments. This is where target-date ETFs come into play. Target-maturity ETFs options from Guggenheim and BlackRock’s iShares only hold bonds that mature in a set year and distributes cash back to investors upon maturity. [Target Date Bond ETFs Reduce Rate Risk]

Additionally, bond investors should also keep in mind credit quality exposure. High-yield, speculative grade, junk bonds tend to perform more like stocks.

Investors who are seeking a little extra bump in yields can consider junk bond ETFs, and some sponsors now offer short-duration options to help limit rate risk. The SPDR Barclays Short Term High Yield Bond ETF (NYSEArca: SJNK) has a 2.13 year duration and a 3.84% 30-day SEC yield, and iShares 0-5 Year High Yield Corporate Bond ETF (NYSEArca: SHYG) has a 2.14 year duration and a 3.40% 30-day SEC yield.

For more information on bonds, visit our bond ETFs category.

Max Chen contributed to this article.