Loading the player...

DEFINITION of 'Bond ETF'

A type of exchange-traded fund (ETF) that exclusively invests in bonds. Bond ETFs are very much like bond mutual funds in that they hold a portfolio of bonds and can differ widely in strategies, ranging from U.S. Treasuries to high yields, from long-term to short-term. Bond ETFs trade like stocks and are passively managed.

BREAKING DOWN 'Bond ETF'

A bond ETF trades throughout the day and is therefore more liquid than a mutual fund, which only trades at one price a day according to its net asset value. The drawback to this is that a broker fee is incurred when trading in an ETF, much like when trading a stock.

RELATED TERMS
  1. ETF Of ETFs

    An exchange-traded fund (ETF) that tracks other ETFs rather than ...
  2. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  3. Bond Yield

    The amount of return an investor will realize on a bond. Several ...
  4. Stock ETF

    A security that tracks a particular set of equities, similar ...
  5. Total Bond Fund

    A mutual fund or exchange-traded fund that seeks to replicate ...
  6. Bond

    A debt investment in which an investor loans money to an entity ...
Related Articles
  1. Investing

    Bond ETFs: A Viable Alternative

    Discover the advantages of a security that tracks bond index funds, but trades like a stock.
  2. Investing

    Pros & Cons Of Bond Funds Vs. Bond ETFs

    Understanding the pros and cons of bond funds and bond ETFs will help you choose the instrument that is best for building your diversified bond portfolio.
  3. Investing

    What's The Difference Between Bond & Equity ETFs?

    Learn how different stock ETFs and bond ETFs are, though they actually have quite a few things in common.
  4. Investing

    What Happens to Bond ETFs in Stressed Markets?

    We are going to dive a little deeper today at how bond exchange traded funds (ETFs) fare when the markets are stressed.
  5. Financial Advisor

    What Are the Pros and Cons of Fixed-Income ETFs? (BND, AGG)

    Like all investments, fixed-income ETFs have their pros and cons. But do the advantages outweigh the disadvantages?
  6. Managing Wealth

    Preferred Stock ETFs Vs Bond ETFs

    If you’re weighing an investment in a preferred stock exchange-traded fund versus a bond ETF, there are two factors you should consider most.
  7. Investing

    What Are The Three Key Elements of a Bond ETF?

    We explore the bond ETFs basics, because the only way to appreciate the benefits that this type of investment offers is to first understand how they work.
  8. Investing

    BND vs. AGG: Comparing Bond ETFs

    Compare structure and performance for the two largest domestic bond ETFs, the iShares Core U.S. Aggregate Bond ETF and the Vanguard Total Bond Market ETF.
  9. Investing

    An Introduction To Corporate Bond ETFs

    Learn about the pros and cons of these specialized ETFs, and get in on the opportunities they can provide.
RELATED FAQS
  1. Why are simple-interest loans preferred by payday loan companies and pawn shops?

    Learn how you can invest in the corporate bond market without investing a large amount of capital through bond funds and ... Read Answer >>
  2. Are there Exchange Traded Funds (ETFs) that offer a high bond yield?

    Learn which exchange-traded funds offer high bond yield. Bond yields are driven by factors such as interest rates and credibility ... Read Answer >>
  3. What exactly is an ETF portfolio?

    Learn what exchange-traded funds (ETFs) are and their advantages to investors, what a portfolio of ETFs is, and discover ... Read Answer >>
  4. What are the top high yield bond ETFs?

    Discover how high-yield bond ETFs are useful to investors, along with information about three of the most popular high-yield ... Read Answer >>
  5. Can mutual funds only hold bonds?

    Find out which mutual funds include only bonds in their portfolios. Learn why some funds invest in different types of bonds ... Read Answer >>
  6. Do ETFs pay capital gains?

    Learn about exchange-traded funds (ETFs), which can generate capital gains for their shareholders due to occasional and substantial ... Read Answer >>
Hot Definitions
  1. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  2. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  3. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  4. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  5. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  6. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
Trading Center