9 Best Long-Term Bond ETFs Of May 2024

The iShares 10+ Year Investment Grade Corporate Bond ETF provides ultra low-cost exposure to the universe of investment-grade corporate bonds. The fund’s benchmark is the ICE Bank of America 10+ Year US Corporate Index.

IGLB’s portfolio of more than 3,500 issues practically eliminates default risk. A 30-day SEC yield of 6.20% and monthly distributions provide dependable cash flow for income investors. The majority of corporate bonds are rated A or BBB, with approximately 10% of issues rated AA.

The fund’s performance modestly beats its Morningstar category’s annual averages over the past one, three and five years. It matches its bogey’s average annual return over the past 10 years. As would be expected from a long-term bond ETF, EGLB’s performance has been more volatile than typical short- or intermediate-term bond ETFs over the past three, five and 10 years.

The Vanguard Long-Term Corporate Bond ETF delivers dependable cash flow by investing in high-quality corporate bonds with maturities between 10 and 25 years. The fund charges the same fee as IGLB, but tracks the Bloomberg U.S. 10+ Year Corporate Bond Index.

VCLT owns nearly 2,800 bonds, offering less diversification than IGLB. The portfolio average effective maturity is about 23 years, with an average effective duration of about 13 years. The credit quality is distributed with about 47% in BBB-rated bonds, about 42% in A-rated debt and the rest in AAA and AA issues.

The SPDR Portfolio Long-Term Corporate Bond ETF is a head-to-head competitor with IGLB and VCLT, offering a comparably low-cost path to the universe of long-term, investment grade corporate debt. Investors benefit from the strong State Street Global Advisors fixed income team and sound management.

The fund’s benchmark, the Bloomberg Long U.S. Corporate Index, is more focused than its competitors’ bogies as it solely tracks dollar-denominated bonds issued by industrial, utility and financial firms in the U.S. and overseas.

SPLB holds roughly 2,800 issues with an average effective maturity of about 23 years and an average effective duration of about 13 years. SPLB posts a generous 6.55% yield to maturity. Long term investment returns should approximate the yield to maturity.

The Vanguard Long-Term Bond ETF gives investors a very broad portfolio of investment-grade bonds at a very low annual cost. Its bogey is the Barclays U.S. Long Government/Credit Float Adjusted Index, which tracks U.S. government debt, dollar-denominated foreign issues and corporate bonds with maturities of 10 years or greater.

BLV owns roughly 3,000 bonds, with an average effective maturity of about 23 years and an average effective duration of about 14 years. This well-diversified fund devotes 46% of its assets to U.S. government bonds, making about half the income exempt from state and local taxes. The remaining portion is investment-grade corporate bonds.

This iShares Core 10+ Year USD Bond ETF is a strong choice as a core fixed-income holding for a well diversified investment portfolio. ILTB’s benchmark is the Bloomberg U.S. Universal 10+ Year Index, which tracks dollar-denominated corporate and government high-yield or investment-grade bonds with remaining maturities of at least 10 years.

As of our writing, ILTB posts a weighted average maturity of about 23 years for its more than 3,300 bonds. ILTB’s average effective duration is nearly 14 years. Presently the portfolio is evenly split between government and corporate bonds. Overall, roughly 50% are rated AAA or AA.

The FlexShares Credit-Scored U.S. Long ETF owns mainly investment grade U.S. corporate bonds. LKOR focuses on long maturities, issuer quality and value. And it really puts the “long” in long-term, with a weighted average maturity of about 24 years and an average effective duration of about 13 years.

But be warned, LKOR is very volatile. Still, LKOR has beaten its Morningstar category average this calendar year and over the past 12 months as well as the past five years.

The portfolio includes more than 480 holdings, and it turns over 58% of them annually. About 90% of the bonds are from U.S. firms, plus about 4% each from the U.K. and Canada, with the remainder from across the globe, broadening international diversification.

Interest earned from U.S. Treasury securities is subject to federal income tax, but it’s exempt from state and local taxes. That’s one reason the iShares 20+ Year Treasury Bond ETF can be a good choice for investors who live in high-tax states. Another is that TLT regularly ranks among the top-40 largest ETFs by total assets, meaning that it’s highly liquid.

But thanks to the low long-term interest rates that prevailed until very recently, you’re not going to earn the highest yields from long-term government bonds. Still, that makes TLT an attractive opportunity for capital gains once interest rates decline.

TLT’s portfolio includes about 40 Treasurys with an average SEC yield near 4%. The fund’s weighted average maturity is about 25 years, and the average effective duration is about 17 years.

For investors striving to protect their money from the ravages of inflation, the Pimco 15+ Year U.S. TIPS ETF is an ideal solution. This fund aims to deliver real returns that beat inflation, plus capital preservation. Just note that this fund’s annual returns show a lot of volatility.

LTPZ focuses on AAA-rated U.S. Treasury inflation protected securities, commonly known as TIPS. Their average effective maturity is about 22 years, with an average effective duration of about 19 years.

VanEck’s Long Muni ETF is a great choice for retirees and high-net-worth individuals looking for a tax-efficient municipal bond fund.

MLN’s benchmark is the ICE Long AMT-free Muni Bond index. Many investors prefer municipal bonds because income from them is exempt from federal taxes—but some are subject to the alternative minimum tax. Funds like MLN aim to avoid the latter, labeling themselves “AMT-free.” Depending upon your state of residence, part of the income might be free from state income taxes, too.

MLN reports 23.63 years to maturity for its portfolio. MLN’s average effective duration is roughly 11 years. About 60% of MLN’s bonds carry a credit rating of A, AA or AAA. Nearly 50% of MLN bonds come from issuers in New York, California and Texas.