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Article #2: Investing for US citizens: Choosing bond ETFs for your lazy portfolio

In the first article dedicated for investing for US citizens, I addressed the issues facing dual US-Israeli citizens who wish to invest in the stock market. I proposed a few options for constructing a passive stock-bond portfolio that is suitable for US investors.

In this short article, I wish to expand a bit more on the bond side of the portfolio and propose a few options for bond ETFs that have very low expense ratios, are highly liquid, includes investment grade bonds but provide a higher yield as compared to Vanguard BSV mentioned in the previous article.

These bond ETFs, namely Vanguard BND, iShares AGG, Schwab SCHZ and SPDR SPAB, include longer-duration bonds and are therefore more volatile. For example, the average duration in BND is 6.5 years. LQD includes mostly corporate bonds, so it has a higher yield at the cost of increased risk and a larger expected correlation with stocks.


1. Vanguard Total Bond Market ETF (BND): This ETF tracks the performance of the Bloomberg Barclays U.S. Aggregate Float Adjusted Index, which includes investment-grade bonds issued by the U.S. Treasury, government agencies, and corporations.

2. iShares Core U.S. Aggregate Bond ETF (AGG): This ETF tracks the performance of the Bloomberg Barclays U.S. Aggregate Bond Index, which is a broad-based index that includes investment-grade bonds issued by the U.S. Treasury, government agencies, and corporations.

3. iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD): This ETF invests in investment-grade corporate bonds issued by U.S. companies. It seeks to track the performance of the Markit iBoxx USD Liquid Investment Grade Index.

4. Schwab U.S. Aggregate Bond ETF (SCHZ): This ETF seeks to track the performance of the Bloomberg Barclays U.S. Aggregate Bond Index. It invests in a diversified portfolio of investment-grade bonds issued by the U.S. Treasury, government agencies, and corporations. 5. SPDR Portfolio Aggregate Bond ETF (SPAB): This ETF tracks the performance of the Bloomberg Barclays U.S. Aggregate Bond Index. It invests in a diversified portfolio of investment-grade bonds issued by the U.S. Treasury, government agencies, and corporations.



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