These exchange-traded funds own bonds with maturities averaging less than 3 years.
If you want to limit your risk without erasing your yield, a portfolio of bonds maturing over the next three years is a way to do it. The cost winner here, iShares 1-3 Year Credit Bond (CSJ), has a duration of not quite 2 years (meaning: as much rate risk as a zero-coupon bond due in 2 years) and an average credit quality of A. Yield, per the SEC formula: 2.9%.
For more security about having principal repaid, go to the Treasury category. Schwab Short-Term Treasury (SCHO) and SPDR Portfolio Short Term Treasury (SPTS) have the same duration but an AAA credit quality. They yield half a percentage point less.
Two diversified funds and two Treasury-focused funds merit inclusion on the Honor Roll.
Best ETFs: Short-Term Bond Funds
Diversified
| Ticker | Exchange-Traded Fund | Holding Cost1 | Liquidity Score2 | Assets ($bil) |
| CSJ | iShares 1-3 Year Credit Bond* | $70 | A | 10.8 |
| SLQD | iShares 0-5 Year Invmt Grade Corp Bd* | 82 | B | 0.8 |
| ISTB | iShares Core 1-5 Year USD Bond | 90 | A | 1.9 |
| SPSB | SPDR Portfolio Short Term Corp Bd | 115 | A | 4.1 |
| BSV | Vanguard Short-Term Bond | 116 | A | 24.3 |
| IBDM | iShares iBonds Dec 2021 Term Corp | 152 | C | 0.7 |
| IBDL | iShares iBonds Dec 2020 Term Corp | 153 | B | 0.6 |
| IBDK | iShares iBonds Dec 2019 Term Corp | 155 | B | 0.6 |
| IBDH | iShares iBonds Dec 2018 Term Corp | 160 | B | 0.4 |
| IBCD | iShares iBonds Mar 2020Tm CorpexFncl | 167 | D | 0.1 |
| IBDC | iShares iBonds Mar 2020 Term Corp | 169 | C | 0.1 |
| BSCI | PowerShares BulletShrs 2018 Corp Bd | 170 | B | 0.8 |
| BSCK | PowerShares BulletShrs 2020 Corp Bd | 172 | B | 1.1 |
| BSCJ | PowerShares BulletShrs 2019 Corp Bd | 172 | B | 1.1 |
| SUSB | iShares ESG 1-5 Year USD Corp Bd | 224 | D | 0.03 |
| FLTR | VanEck Vectors Investment Grd Fl Rt | 235 | B | 0.4 |
| SHAG | WisdomTree Brclys Yld Enh USS-TAggtBd | 235 | D | 0.03 |
| FLRN | SPDR Blmbg Barclays Inv Grd Flt Rt | 244 | A | 2.8 |
| PULS | PGIM Ultra Short Bond | 247 | B | 0.03 |
| JPST | JPMorgan Ultra-Short Income | 296 | A | 0.6 |
| FLOT | iShares Floating Rate Bond | 305 | A | 9.2 |
| LQDH | iShares Interest Rate Hedged Corp Bd | 333 | B | 0.2 |
| NUSA | NuShares EY 1-5 Year US Aggt Bd | 351 | D | 0.02 |
| ULST | SPDR SSgA Ultra Short Term Bond | 352 | C | 0.04 |
| AGZD | WisdomTree Barclays IntrRtHgUSAggtBd | 396 | D | 0.03 |
| NEAR | iShares Short Maturity Bond | 399 | A | 3.7 |
| GSY | PowerShares Ultra Short Duration | 406 | A | 1.2 |
| RAVI | FlexShares Ready Access Variable Inc | 420 | C | 0.1 |
| LDRI | PowerShares LadderRite 0-5Yr Corp Bd | 431 | F | 0.01 |
| CLYH | iShares Interest Rt Hdg 10+Yr CrdtBd | 473 | D | 0.04 |
| VRIG | PowerShares Variable Rate Invmt Grd | 488 | B | 0.3 |
| AGND | WisdomTree Barclays NgtDur US AggtBd | 493 | D | 0.04 |
| IGHG | ProShares Investment Grade—Intr Rt Hdgd | 513 | C | 0.6 |
| MINT | Pimco Enhanced Short Maturity Active | 563 | A | 9.1 |
| FTSM | First Trust Enhanced Short Maturity | 564 | A | 2.1 |
| VNLA | Janus Henderson Short Duration Inc | 568 | B | 0.4 |
| USTB | USAA Core Short-Term Bond | 584 | D | 0.05 |
| HOLD | AdvisorShares Sage Core Reserves | 585 | C | 0.1 |
| FLTB | Fidelity Limited Term Bond | 592 | B | 0.1 |
| ARCM | Arrow Reserve Capital Management | 618 | C | 0.1 |
| LSST | Natixis Loomis Sayles Shrt Dur Inc | 634 | D | 0.02 |
| LDUR | Pimco Enhanced Low Duration Active | 657 | C | 0.2 |
Treasury and government-backed bonds
| SCHO | Schwab Short-Term US Treasury* | 102 | A | 2.5 |
| SPTS | SPDR Portfolio Short Term Treasury* | 102 | B | 0.3 |
| VGSH | Vanguard Short-Term Treasury | 117 | A | 2.2 |
| ICSH | iShares Ultra Short-Term Bond | 134 | B | 0.3 |
| CLTL | PowerShares Treasury Collateral | 136 | B | 0.5 |
| GBIL | Goldman Sachs TreasuryAccess 0-1 Year | 198 | A | 1.2 |
| BIL | SPDR Blmbg Barclays 1-3 Mth T-Bill | 221 | A+ | 3.7 |
| SHV | iShares Short Treasury Bond | 243 | A+ | 13.6 |
| SHY | iShares 1-3 Year Treasury Bond | 245 | A+ | 12.7 |
| TFLO | iShares Treasury Floating Rate Bond | 248 | B | 0.1 |
| USFR | WisdomTree Bloomberg Floating Rt Trs | 249 | B | 0.1 |
| TUZ | Pimco 1-3 Year US Treasury | 252 | C | 0.1 |
| FTSD | Franklin Liberty Short Dur US Govt | 412 | B | 0.2 |
*Best ETFs Honor Roll Member
1 Cumulative cost of holding a $10,000 position for a decade. Incorporates annual expense ratio, bid/ask spreads and cost offset from securities lending. 2Reflects bid/ask spreads and trading volume. A = easy to trade.
Data sources: Morningstar, Bloomberg, fund distributors.
