Total bond market ETFs differ on mandates, fees, holdings and returns
Updated
Updated · The Wall Street Journal · May 3
Total bond market ETFs differ on mandates, fees, holdings and returns
6 articles · Updated · The Wall Street Journal · May 3
Vanguard’s $153 billion BND charges 0.03% and returned 6.1% over one year, while Fidelity’s $26 billion FBND charges 0.36% and returned 7.18% as of April 22.
BND passively tracks a version of the Bloomberg US Aggregate index, while active FBND can hold foreign and up to 20% high-yield debt, increasing credit risk in pursuit of income.
Other active core and core-plus funds from JPMorgan, Capital Group and Dimensional also outperformed some passive peers, but advisers said investors should weigh prospectus limits, liquidity and drawdown risk, not yield alone.
With so many 'total bond market' ETFs differing in risk and strategy, how can investors truly know which one matches their financial goals?
As bond ETF innovation accelerates, are investors prepared for the new risks introduced by target maturity and floating rate products?
Could hidden trading costs and liquidity risks in bond ETFs outweigh the benefits of low fees or higher yields during the next market shock?