With various industries continually finding ways to rally through various news events and even economic uncertainty, 2019 has still managed to be an exciting year for stocks and ETFs. Fixed income ETFs, whose shares are traded on major stock exchanges, are a special type of fund designed to track the performance of a specific bond market index. The wide variety of bond ETFs has allowed investors the opportunity to achieve broad or targeted bond market exposure.
Here are the 10 best performing fixed income ETF offerings for 2019, according to XTF.com data, as of Dec. 30, 2019:
1. Vanguard Long-Term Corporate Bond ETF (VCLT) – up 24.52% YTD
The Vanguard Long-Term Corporate Bond ETF seeks to track the performance of a market-weighted corporate bond index with a long-term dollar-weighted average maturity. With a drive to provide a high and sustainable level of current income, VCLT invests primarily in high-quality (investment-grade) corporate bonds. Additionally, it maintains a dollar-weighted average maturity of 10 to 25 years.
2. SPDR Portfolio Long Term Corporate Bond ETF (SPLB) – up 24.31% YTD
The investment seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Bloomberg Barclays U.S. Long Term Corporate Bond Index. SPLB generally invests substantially all, but at least 80%, of its total assets in the securities comprising the index and in securities the Adviser determines have economic characteristics that are substantially identical to the economic characteristics of the securities that comprise the index. The index is designed to measure the performance of U.S. corporate bonds that have a maturity of greater than or equal to 10 years.
3. PIMCO 25+ Year Zero Coupon US Treasury Index Fund (ZROZ) – up 24.19% YTD
ZROZ seeks to provide total return that closely corresponds, before fees and expenses, to the total return of The BofA Merrill Lynch Long Treasury Principal STRIPS IndexSM. The fund aims to achieve, before fees and expenses, the yield and duration exposure inherent in a long U.S. Treasury fund. It may also provide reduced bid-ask spreads and premium/discount to NAV, in addition to possibly reduced trading expenses. Additionally, ZROZ’s ETF structure allows for trading throughout the day with the same expense ratio for all investors, regardless of investment size.
4. FlexShares Credit-Scored U.S. Long Corporate Bond Index Fund (LKOR) – up 24.07% YTD
The Fund seeks investment results generally corresponding to the price and yield performance, before fees and expenses, of the Northern Trust Credit-Scored US Long Corporate Bond Index. The fund generally will invest at least 80% of its total assets in the securities of its underlying index. The underlying index reflects the performance of U.S.-dollar denominated bonds of companies to have higher credit quality, lower risk of default and the potential for higher yield, price appreciation and liquidity relative to the universe of securities comprising the Northern Trust Investment-Grade US Long Corporate Bond IndexSM. It is non-diversified.
5. iShares Long-Term Corporate Bond ETF (IGLB) – up 23.85% YTD
The iShares Intermediate-Term Corporate Bond ETF seeks to track the investment results of an index composed of U.S. dollar-denominated investment-grade corporate bonds with remaining maturities between five and ten years. IGLB is also good for its use to customize a bond allocation and pursue income.
6. Vanguard Ext Duration Treasury ETF (EDV) – up 20.87% YTD
EDV Seeks to track the performance of the Bloomberg Barclays U.S. Treasury STRIPS 20–30 Year Equal Par Bond Index. The fund is passively managed using index sampling. It also provides diversified exposure to the long-term Treasury STRIPS market, as well as high current income with high credit quality.
7. iShares Core 10+ Year USD Bond ETF (ILTB) – up 20.73% YTD
The iShares Core 10+ Year USD Bond ETF seeks to track the investment results of an index composed of U.S. dollar-denominated bonds that are rated either investment grade or high-yield with remaining maturities greater than ten years. The fund’s importance comes from this exposure to long-term U.S. dollar-denominated investment grade and high yield bonds. Additionally, ILTB features low cost, targeted access to government, corporate, and emerging market bonds that mature in 10+ years. The use at the core of a portfolio to seek stability and pursue income.
8. VanEck Vectors CEF Municipal Income ETF (XMPT) – up 20.36% YTD
This fund seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the S-Network Municipal Bond Closed-End Fund Index (CEFMXTR), which is intended to track the overall performance of the U.S.-listed closed-end funds that invest in U.S. dollar-denominated tax-exempt market. XMPT will help build a portfolio of municipal CEFs that may produce yields higher than most other fixed income investments. The fund also features a reduced single fund risk with a portfolio of CEFs managed by leading active fixed income managers. Additionally, the index assigns a greater weight to CEFs trading at discounts, potentially enhancing yield and the opportunity for capital appreciation.
9. Vanguard Long-Term Bond ETF (BLV) – up 19.99% YTD
BLV seeks to track the performance of the Bloomberg Barclays U.S. Long Government/Credit Float Adjusted Index. It’s in an exchange-traded share class. The fund is also passively managed using index sampling. Additionally, it features diversified exposure to the long-term, investment-grade U.S. bond market. Lastly, BLV provides high current income with high credit quality.
10. iPath US Treasury 5-year Bull ETN (DFVL) – up 18.77% YTD
The investment seeks to provide investors with exposure to the Barclays 5Y US Treasury Futures Targeted Exposure Index. The Barclays 5Y US Treasury Futures Targeted Exposure Index™ (the “index”) is designed to decrease in response to an increase in the 5-year Treasury note yields and to increase in response to a decrease in 5-year Treasury note yields. The index targets a fixed level of sensitivity to changes in the yield of the current “cheapest-to-deliver” note underlying the relevant 5-year Treasury futures contract at a given point in time.