IUSB also has a slightly higher expense ratio of 0.15%, compared to AGG. Investors, though, may find a higher 1.96% 30-day SEC yield in IUSB, compared to AGG’s 1.85% 30-day SEC yield.

For a more all-inclusive bond investment portfolio, investors would still need to supplement their position with municipal bonds and Treasury inflation-protected securities, which are not included in either IUSB or the Aggregate Index.

For munis exposure, there are a number options, including the iShares National AMT-Free Muni Bond ETF (NYSEArca: MUB), SPDR Nuveen Barclays Municipal Bond ETF (NYSEArca: TFI) and Market Vectors Intermediate Municipal Index ETF (NYSEArca: ITM).

Additionally, investors can take a look at TIPS ETFs, such the iShares TIPS Bond ETF (NYSEArca: TIP), Schwab U.S. TIPS (NYSEArca: SCHP) and SPDR Barclays TIPS ETF (NYSEArca: IPE) to limit the negative effects of rising inflation on real returns. [Big Bets Made on big TIPS ETF]

For more information on fixed-income strategies, visit our bond ETFs category.

Max Chen contributed to this article.