Over 77% of AGGY’s holdings are rated AAA or A while another 29% are rated BBB. The ETF features nearly 2,100 bonds.

“To increase its return, the portfolio reweights the components of the Aggregate Index to emphasize the higher-yielding areas of the investment-grade market,” said Morningstar. “This dynamic approach allows the fund to shift its sector exposure (credit, securitized, and government) as sector fundamentals and investor appetites evolve. The portfolio has a few constraints to keep it diversified and prevent it from taking too much risk. These include limiting tracking error to the Aggregate Index, keeping the subcomponent weightings within 20% of the parent index, and limiting duration to no more than one year longer than that benchmark.”

AGGY garners a Bronze rating from Morningstar.

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