The Best Bond Index Funds to Buy from Vanguard and Fidelity

If you’re looking for low-cost investment options, both Vanguard Investments and Fidelity are good options to consider. Both companies are well-known and offer low fees. They allow you to invest in many of the best bond index funds that cover all major types of bonds.

Aggregate Bond Market Funds

An aggregate bond market fund can form the core of a fixed-income portfolio. These funds track the performance of the entire bond market. This allows you to invest broadly with a single fund.

Long-Term Bonds

Long-term bond funds invest in bonds that mature in more than 10 years. These funds perform best when interest rates are falling.

Short-Term Bonds

Short-term bonds are a good option if you’re looking for low market risk with an investment period of less than three years. Short-term bonds also carry lower risks in the area of interest rates.

International Bonds

An index fund that invests in foreign bonds allows you to diversify your bond fund portfolio outside the U.S. market. These funds are subject to interest rate risks.

Alternative Bond Types

There are several specialized categories of bonds. Some bonds available as index funds worth considering are tax-exempt bonds and Treasury Inflation-Protected Securities (TIPS).

Warning Before Buying

Bond index funds are useful diversification tools and can outperform actively managed funds over the long term. However, they are passively managed, meaning fund managers cannot actively buy and sell assets.

Frequently Asked Questions

What are bonds?

What are bond funds?

Sources:
– Vanguard. “Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX).”
– Fidelity Investments. “Fidelity Total Bond Fund.”
– Vanguard. “Vanguard Long-Term Bond Index Fund Admiral Shares (VBLAX).”
– Fidelity Investments. “Fidelity Long-Term Treasury Bond Index Fund.”
– Vanguard. “Vanguard Short-Term Bond Index Fund Admiral Shares (VBIRX).”
– Fidelity Investments. “Fidelity Short-Term Treasury Bond Index Fund.”
– Vanguard. “Vanguard Total International Bond Index Fund Admiral Shares (VTABX).”
– Vanguard. “Vanguard Tax-Exempt Index Fund Admiral Shares.”
– Fidelity Investments. “Fidelity Inflation-Protected Bond Index Fund.”

Source: https://www.thebalancemoney.com/best-index-funds-for-bonds-4117138