- Articles - 2012 Blog - What is the Best Bond ETF for tracking the Barclays Capital U.S. Aggregate Bond Index? 
                Windsurfing at Palo Alto in SF Bay in May 2009
Best Bond ETF
                Windsurfing at Coyote Point November 2009

Return to home page

March 15, 2012:   What is the best exchange traded fund (ETF) for bonds that attempts to track the Barclays Capital U.S. Aggregate Bond Index? Here are the four choices I want to consider.  Send me an email if you know of any others with the same characteristics including low expense ratios.
SCHZ  = Schwab U.S. Aggregate Bond ETF
"The ETF seeks investment results that track, as closely as possible, before fees and expenses, the total return of the Barclays Capital U.S. Aggregate Bond Index. "
BND:  = Vanguard Total Bond Market ETF
"The fund employs a “passive management”or indexing—investment approach designed to track the performance of the Barclays Capital U.S. Aggregate Float Adjusted Bond Index."
AGG: = iShares Barclays Aggregate Bond
The iShares Barclays Aggregate Bond Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the total United States investment grade bond market as defined by the Barclays Capital U.S. Aggregate Bond Index.
LAG  = SPDR Barclays Capital Aggregate Bond ETF
The SPDR® Barclays Capital Aggregate Bond ETF seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance the Barclays Capital U.S. Aggregate Index (ticker: LBUSTRUU).
First look at annual expenses.  Schwab is the leader with the lowest as of today.

Fund symbol & expense ratio comparison
Schwab Vanguard SPDRs iShares 

Now lets look at performance which is how well they track their index net of expenses since the newest bond ETF, SCHZ, started (first chart) and YTD for 2012 (second chart.)

What is the Best Bond

Best Bond Fund YTD

Schwab's SCHZ appears to have higher volatility which may reflect lower liquidity.  For now, I'd probably pick one of the other three.  Fidelity gives you free trades with iShares and Schwab gives free trades with their funds in their accounts so you need to calculate the small commission into the total expenses.  A small $7.95 commission on a $10,000 bond investment adds 0.08% to the annual fee if held for a year.  Thus the savings on commissions could be more significant than the actual expense ratios!   If you are only buying $1,000 worth of a bond ETF, then you for sure want to go where you can get it without a commission!  

Current quotes and charts for:  SPY - DIA -  GoldGLD

I used the gains in my own stock portfolio these past years to "semi retire" in 1998 as I invested time to build up my online income from free articles, commissions for some products I recommend and selling newsletters.     You can read about my success in this May 9, 2007 Los Altos Town Crier  Newspaper Article (online version & PDF version.)
  • Subscribe to my service NOW and get the March 2012 Issue for FREE!  
  • Get email alerts when I buy or sell securities for my explore portfolio
  • "Auto Buy" and "Auto Sell" levels set ahead of time for target buy and sell levels for my securities.  This allows you to place "limit orders" with your broker in advance so you can go about your business.
  • All questions about what I write answered by Email.  If what I write is not clear to you, just ask!
  • (More Info, Testimonials & Portfolio Returns)
Note 1. 
Long Term Results that Speak for Themselves
Click for FREE sample of Kirk Lindstrom's
                    Investment Letter

TOP of Page

tweet this:
Article: What is the Best Bond ETF?  $BND $SCHZ $AGG $LAG

==> Best CD Rates with FDIC <==

Home of "CORE & Explore®" investing.

  Articles & Special charts for 2012 & 2011

Disclaimer:  The information contained in this web site is not intended to constitute financial advice, and is not a recommendation or solicitation to buy, sell or hold any security. This blog is strictly informational and educational and is not to be construed as any kind of financial advice, investment advice or legal advice. Copyright © 2012 Kirk Lindstrom. Note: "CORE & Explore®" was coined by and is a registered trademark of Charles Schwab & Co., Inc.