These 23 funds are the cheapest of their type for in-and-out trades.
Shutterstock
What does it cost to own the whole bond market for a brief period? This ranking tells you.
The table scores exchange-traded funds for their three-month holding costs, defined to include the effect of bid/ask spreads, expense ratios and cost offsets from securities lending (for the few funds that lend out their bonds). The medium-term category covers portfolios with average bond maturities between 3 and 9 years.
BlackRock’s iShares family has the winners in cost efficiency for speculative trades, in both the diversified and government-only categories. For every $10,000 invested, you will lose only a bit more than $2 to hold iShares Core U.S. Aggregate Bond (AGG) for three months. It would deliver a quick gain if interest rates reverse their recent trend and drift back down.
| 3-month Holding Cost* | |||
| Liquidity Score | |||
| Ticker | Exchange-traded fund | ||
| Diversified and corporate | |||
| CIU | iShares Intermediate Credit Bond | $1.97 | A |
| AGG | iShares Core US Aggregate Bond | 2.14 | A+ |
| BND | Vanguard Total Bond Market | 2.55 | A+ |
| VCIT | Vanguard Interm-Term Corp Bd | 2.99 | A |
| SCHZ | Schwab US Aggregate Bond | 3.03 | A |
| VCSH | Vanguard Short-Term Corporate Bond | 3.07 | A |
| BIV | Vanguard Interm-Term Bond | 3.98 | A |
| LQD | iShares iBoxx $ Invmt Grade Corp Bd | 4.05 | A+ |
| CRED | iShares US Credit Bond | 4.35 | B |
| SPAB | SPDR Portfolio Aggregate Bond | 4.58 | A |
| SPIB | SPDR Portfolio Interm Term Corp Bd | 4.70 | A |
| IUSB | iShares Core Total USD Bond Market | 7.06 | B |
| AGGY | WisdomTree Barclays YldEnh US AggtBd | 8.26 | B |
| BSCL | PowerShares BulletShrs 2021 Corp Bd | 8.65 | B |
| BSCM | PowerShares BulletShrs 2022 Corp Bd | 8.68 | B |
| Government | |||
| MBB | iShares MBS | 3.26 | A |
| VGIT | Vanguard Intmdt-Term Trs | 3.41 | A |
| SCHR | Schwab Intermediate-Term US Trs | 3.97 | A |
| VMBS | Vanguard Mortgage-Backed Secs | 4.25 | A |
| IEF | iShares 7-10 Year Treasury Bond | 4.80 | A+ |
| IEI | iShares 3-7 Year Treasury Bond | 4.86 | A |
| ITE | SPDR Blmbg Barclays Interm Term Trs | 5.95 | B |
| GOVT | iShares US Treasury Bond | 7.96 | A |
*Cost of a $10,000 position held for three months. Reflects bid/ask spread, expense ratio and cost offset from securities lending.
Data sources: Morningstar, Bloomberg, fund distributors
Investing for the long haul is a different proposition, and different funds climb to the top. For rankings on ten-year holding costs, see Best ETFs for Investors: Medium-Term Bonds.
For links to short-term rankings in other categories, see Best ETFs for Trading.