What can bond ETFs do for you?

Bonds can provide income and capital preservation for investors, but they may also add valuable diversification and risk reduction benefits when part of an equity portfolio.

Is your portfolio really diversified?

The diversification benefits that bonds can provide take on an important role in highly volatile markets.

Investing in bond funds that have significant allocations to riskier sectors like high yield bonds can come at the cost of increased correlations with equities. Broad market bond ETFs can offer low correlation relative to stocks, which can help reduce overall risk in a portfolio.

Simple and low-cost, ETFs are single trade solutions to invest in bonds across a wide-ranging set of market sectors and industries.

Bond building blocks to help diversify your portfolio


iShares Core U.S. Aggregate Bond ETF iShares Core Total USD Bond Market ETF iShares iBoxx $ Investment Grade Corporate Bond ETF
Correlation to Equities 0.08 0.32 0.56
3-Year Return 5.28% 5.41% 7.80%
3-Year Risk 3.41% 3.46% 7.61%

Source: BlackRock as of 12/31/20. Correlation to equities is based on the 3-year correlation with the S&P 500 Index. Risk and Return based on 3-year annualized NAV return and standard deviation. Correlation measures how two securities move in relation to each other. Correlation ranges between +1 and -1. A correlation of +1 indicates returns moved in tandem, -1 indicates returns moved in opposite directions, and 0 indicates no correlation. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor's shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. For standardized performance, click here.