Best bond funds for retirement investors
- By Brian Baker,
- Bankrate.com
- – 06/09/2022
When it comes to saving for retirement, investors generally use a combination of equity and fixed income investments. If you’re young and retirement is still far off, your portfolio is more likely to hold mostly equity (stock-based) investments because you have a long time to make up for any short-term fluctuations in the markets. And then as you approach retirement, your portfolio allocation should begin to shift more toward investments thought to be safer, such as bonds and other fixed-income securities.
Knowing which bond investments to choose can be somewhat confusing and difficult. Despite all the attention that stocks get, the bond market is actually larger than the stock market. The global bond market value was about $123.5 trillion in 2020, compared to $105.8 trillion for the global equity market, according to the Securities Industry and Financial Markets Association.
Top bond funds for retirement portfolios
Here are some of the best bond funds to consider for your retirement portfolio.
*Note: Data as of June 6, 2022
iShares Core U.S. Aggregate Bond ETF
The iShares Core U.S. Aggregate Bond ETF (
5-year annualized return: 0.84 percent
Yield: 2.92 percent
Expense ratio: 0.04 percent
Fund assets: $82.2 billion
Vanguard Total Bond Market ETF
The Vanguard Total Bond Market ETF (
5-year annualized return: 0.89 percent
Yield: 3.09 percent
Expense ratio: 0.03 percent
Fund assets: $80.8 billion
Fidelity U.S. Bond Index Fund
The Fidelity U.S. Bond Index Fund (
5-year annualized return: 0.87 percent
Yield: 2.04 percent
Expense ratio: 0.025 percent
Fund assets: $53.4 billion
Vanguard Short-Term Corporate Bond ETF
The Vanguard Short-Term Corporate Bond ETF (
5-year annualized return: 1.52 percent
Yield: 3.56 percent
Expense ratio: 0.04 percent
Fund assets: $40.9 billion
iShares Floating Rate Bond ETF
The iShares Floating Rate Bond ETF (
5-year annualized return: 1.39 percent
Yield: 0.87 percent
Expense ratio: 0.15 percent
Fund assets: $9.8 billion
Fidelity Investment Grade Bond Fund
The Fidelity Investment Grade Bond Fund (
5-year annualized return: 1.61 percent
Yield: 1.86 percent
Expense ratio: 0.45 percent
Fund assets: $8.5 billion
Schwab U.S. Aggregate Bond Index Fund
The Schwab U.S. Aggregate Bond Index Fund (
5-year annualized return: 0.79 percent
Yield: 2.26 percent
Expense ratio: 0.04 percent
Fund assets: $4.6 billion