Investors seeking an easy way to fill out a fixed-income portfolio may start off with an aggregate or total bond market exchange traded fund that provides diversified exposure to U.S. government and corporate debt securities.

For instance, the Barclays U.S. Aggregate Bond Index has been the go-to benchmark for many fixed-income investors. The benchmark tracks U.S. investment-grade corporate bonds, mortgage-backed securities and U.S. Treasuries. However, potential investors should note that the index excludes municipal bonds, Treasury inflation-protected securities and high-yield debt.

Related: 33 Muni Bond ETFs to Augment Income Generation

A fixed-income portfolio’s core positions will typically include many low-risk investments that help support wealth over the long run. U.S. Treasuries has filled this role, accounting for about 70% of the Barclays benchmark.

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These debt securities have served investors well in recent years as a hedge against market volatility and stable source of income. Bonds have also been outperforming this year as a market sell-off and lingering uncertainty pushed investors toward safer debt securities.

Moreover, low inflationary pressures have made fixed-income assets’ real yield, or yield after accounting for inflation, more attractive.

Looking ahead, the eventual Federal Reserve interest rate normalization will be a major headwind for bond funds. Since bond funds are comprised of various debt assets with varying levels of maturities, older debt securities will be discounted in a rising rate environment as newer issues come with more attractive yields.

Related: Global Zero Interest Rate Policies Will Support U.S. Treasury ETFs

Investors seeking a core fixed-income portfolio position may take a look at a number of broad aggregate bond or total bond market ETFs.

Diversified bond ETFs:

  • iShares Core U.S. Aggregate Bond ETF (NYSEArca: AGG)
  • Vanguard Total Bond Market ETF (NYSEarca: BND)
  • Vanguard Short-Term Bond ETF (NYSEArca: BSV)
  • Vanguard Intermediate-term Bond ETF (NYSEArca: BIV)
  • Vanguard Total International Bond ETF (NYSEArca: BNDX)
  • Schwab U.S. Aggregate Bond ETF (NYSEArca: SCHZ)
  • PIMCO Total Return Exchange-Traded Fund (NYSEarca: BOND)
  • SPDR DoubleLine Total Return Tactical ETF (NYSEArca: TOTL)
  • iShares Intermediate Government/Credit Bond Fund (NYSEArca: GVI)
  • SPDR Barclays Aggregate Bond ETF (NYSEArca: BNDS)
  • PowerShares CEF Income Composite Portfolio (NYSEArca: PCEF)
  • iShares Core 1-5 Year USD Bond ETF (NYSEArca: ISTB)
  • SPDR Barclays Investment Grade Floating Rate (NYSEArca: FLRN)
  • iShares Core Total USD Bond Market ETF (NYSEArca: IUSB)
  • Vident Core U.S. Bond Strategy ETF (NasdaqGS: VBND)
  • RiverFront Strategic Income Fund (NYSEArca: RIGS)
  • iShares Government/Credit Bond ETF (NYSEArca: GBF)
  • Newfleet Multi-Sector Unconstrained Bond ETF (NYSEArca: NFLT)
  • iShares Core Long-Term US Bond ETF (NYSEArca: ILTB)
  • Fidelity Total Bond ETF (NYSEArca: FBND)
  • First Trust Enhanced Short Maturity Fund (NasdaqGM: FTSM)
  • AdvisorShares Sage Core Reserves ETF (NYSEArca: HOLD)
  • WisdomTree Barclays U.S. Aggregate Bond Enhanced Yield Fund (NYSEArca: AGGY)
  • iShares Edge U.S. Fixed Income Balanced Risk ETF (BATS: INC)
  • WisdomTree Barclays U.S. Aggregate Bond Zero Duration Fund (NYSEArca: AGZD)
  • AdvisorShares Madrona Forward Global Bond ETF (NYSEArca: FWDB)
  • Guggenheim Total Return Bond ETF (NYSEArca: GTO)
  • iShares Yield Optimized Bond ETF (NYSEArca: BYLD)
  • WisdomTree Barclays U.S. Aggregate Bond Negative Duration Fund (NYSEArca: AGND)
  • Grail McDonnell Core Taxable Bond Fund (NYSEArca: GMTB)
  • WisdomTree Western Asset Unconstrained Bond Fund (NasdaqGM: UBND)

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