The second half of 2019 continues to give investors mixed messages. At one point, volatility had investors deep diving into bonds before positive market-moving news elicited more risk-on vibes in equities, but investors should still consider getting core exposure to bonds regardless of what 2020 brings.

Investor capital was flowing into fixed income ETFs during the month of October, according to a State Street Advisors’ U.S.-Listed Flash Flows report. When it came to stocks and bonds head to head in that month, it was bonds who met the checkered flag first while equities lagged behind.

All in all, equity ETFs attracted $10.9 billion during the month of October, which represents the lowest monthly total for 2019.

“Investors continue to pour billions into bond funds in their quest for moderate returns with relatively low risk,” wrote Randall Forsyth in Barron’s. “And they have been rewarded handsomely this year with stellar performance from corporate bonds—both investment-grade and speculative high-yields—resulting from the ideal combination of falling interest rates and narrowing credit spreads. In a less favorable market, however, bond fund investors could get hurt—not so much by worsening fundamentals, but the funds’ difficulty to meet redemptions in an illiquid market.”

Meanwhile, as investors were piling into bonds, particularly safe haven government debt, this puts downward pressure on yields as bond prices went higher. As such, fixed income investors were starving for yield and that was made apparent in the inflows into high yield ETFs.

High-yield ETFs accumulated more than $1.4 billion in assets during the month of October. For the year thus far, high yield has taken in more than $15 billion.

So where should investors head when it comes to navigating the many options in fixed income? One place is to look at the biggest funds for core exposure like the iShares Core U.S. Aggregate Bond ETF (NYSEArca: AGG).

Here are 10 bond ETFs to look at with the most assets so far in 2019:

SymbolETF NameTotal Assets ($MM)
AGGiShares Core U.S. Aggregate Bond ETF$65,923.16
BNDVanguard Total Bond Market ETF$46,636.38
LQDiShares iBoxx $ Investment Grade Corporate Bond ETF$34,152.53
VCSHVanguard Short-Term Corporate Bond ETF$25,474.08
VCITVanguard Intermediate-Term Corporate Bond ETF$24,902.89
BNDXVanguard Total International Bond ETF$23,882.35
BSVVanguard Short-Term Bond ETF$22,031.99
SHViShares Short Treasury Bond ETF$21,568.27
TIPiShares TIPS Bond ETF$20,037.78
MBBiShares MBS Bond ETF$19,699.01

 

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