7 Top Bond ETFs to Watch in 2026

Bond ETFs are a popular and convenient way for investors to access the bond market. Instead of buying individual bonds, an ETF provides exposure to a diversified portfolio of bonds through a single investment.  

In this article, we will explain what a bond ETF is, examine their advantages and disadvantages, and highlight 7 top bond ETFs to watch.

The information in this article is provided for educational purposes only and does not constitute financial advice. Consult a financial advisor before making investment decisions.

Key Takeaways

What Are Bond ETFs?

Bond ETFs are a type of Exchange-Traded Fund which are designed to track an index composed of bonds. Consequently, they provide investors with exposure to a variety of bonds without having to purchase them individually.

These types of funds are listed on stock exchanges and can be bought and sold throughout the trading day in the same manner as a public company’s shares. 

There are many different types of bond ETFs. Some may provide exposure exclusively to bonds issued by one country’s government, whilst others provide exposure to corporate bonds issued in a certain currency. Investors can also find aggregate bond ETFs, which hold many different types of bonds from a variety of issuers. 

7 Top Bond ETFs in 2026

Like bonds themselves, bond ETFs come in all shapes and sizes. Consequently, the most appropriate one will depend on what you investing goals are and where you want your exposure to be. 

In the following sections, we will take a look at an array of different bond ETFs, focusing on different parts of the world and covering options for both corporate and government issued bonds.

Source: iShares ^{[1][2][3][4][5][7]} and State Street Global Advisors ^[6]. Date Captured: 13 February 2026. Distribution yields are for distributing share classes only and are approximate as of 13 February 2026. Please note that yields are subject to change on a daily basis. Past performance is not a reliable indicator of future results.

iShares Core UK Gilts UCITS ETF

First up on our bond ETF list is the iShares Core UK Gilts UCITS ETF, which tracks the performance of an index composed of UK government bonds (known as gilts).

This bond ETF is composed entirely of conventional gilts across a range of maturities. At the time of writing, around 18% of the ETF is invested in gilts with maturities of more than 20 years and around 6% is invested in gilts with less than one year to maturity.

The UK gilt ETF has approximately £4.5 trillion in net assets across different share classes. It has a total expense ratio of 0.07% and, at the time of writing, the12 month trailing yield for its distributing shares is 4.25%^[1]. 

iShares Core GBP Corp Bond UCITS ETF

The iShares Core GBP Cop Bond UCITS ETF provides investors with exposure to investment grade corporate bonds issued in GBP.  

Investment grade bonds are bonds are debt securities which have been given a high credit rating. This means they typically carry less risk of default but also tend to pay less interest.

It’s important to note that the fact bonds are issued in GBP doesn’t necessarily mean they are issued by UK companies. International companies also issue bonds in GBP and, indeed, the top holdings of this ETF include bonds issued by European and US companies.

The top five bond issuers in this ETF are:

1. HSBC Holdings 
2. Electricite de France (EDF) 
3. Barclays 
4. EON International Finance 
5. Credit Agricole 

This ETF has around £1.9 trillion in net assets across both share classes. Its total expense ratio is 0.20% and, at the time of writing, the 12 month trailing yield of its distributing share class is 4.8%^[2]. 

iShares EUR High Yield Corp Bond UCITS ETF

The iShares EUR High Yield Corp Bond UCITS ETF provides shareholders with exposure to sub investment grade bonds issued in euros. 

As the name suggests, sub investment grade bonds are bonds with low credit ratings which, consequently, pay more interest than investment grade bonds. They are more commonly referred to as junk bonds or high-yield bonds. 

The top five bond issuers in this ETF are:  

1. Fibercop SPA 
2. Schaeffler AG 
3. Teva Pharmaceutical Finance Netherlands 
4. Iliad SA 
5. Forvia SE 

The bond ETF has €8.1 trillion in net assets across share classes and has a total expense ratio of 0.50%. At the time of writing, the 12 month trailing yield of its distributing shares is 5.5%^[3]. 

iShares USD Corp Bond UCITS ETF

The iShares USD Corp Bonds UCITS ETF tracks an index composed of investment grade bonds issued in USD. 

The top five bond issuers in the ETF are:

1. JPMorgan Chase & Co 
2. Bank of America Corp 
3. Goldman Sachs Group 
4. Oracle Corporation 
5. Morgan Stanley 

The net assets of the fund are $8.9 trillion and it has a total expense ratio of 0.20%. At the time of writing, the 12 month distribution yield of its distributing shares is 4.9%^[4].

iShares US Aggregate Bond UCITS ETF

So far, the bond ETFs we’ve looked at have either been composed of government bonds or corporate bonds.  

The iShares US Aggregate Bond UCITS ETF tracks an index composed of the total USD denominated investment grade bond market. That includes investment grade government, government-related, corporate and securitised bonds. 

The United States Treasury is by far the largest issuer in the fund, accounting for almost half the value of the ETF’s entire holdings. This is the list of the top five issuers: 

1. United States Treasury 
2. Federal National Mortgage Association 
3. Federal Home Loan Mortgage Corporation 
4. Government National Mortgage Association 
5. Uniform MBS (Mortgage-Backed Securities) 

The net assets of the fund are $6.1 trillion and it has a total expense ratio of 0.25%. At the time of writing, its distributing shares have a 12 month trailing yield of 3.7%^[5]. 

SPDR Bloomberg Emerging Markets Local Bond UCITS ETF

The SPDR Bloomberg Emerging Markets Local Bond UCITS ETF tracks an index which is composed of local currency bonds issued by governments from emerging markets.  

An emerging market is one which is transitioning from a less-developed economy into a more developed, advanced economy. They show characteristics of a developed market, but don’t yet fully meet the criteria for one. 

These countries may be expected to experience growth in the future, yet, because they are not yet developed markets, they are typically deemed as higher risk. Consequently, bonds from these countries tend to have higher coupon rates than those issued by governments of developed countries. 

The index limits country exposure to a maximum of 10% (i.e. no single country can account for more than 10% of the index); the top five countries represented in the index are as follows: 

1. China
2. South Korea 
3. India 
4. Mexico  
5. Malaysia

The fund's total assets amount to approximately $2.0 trillion and it has a total expense ratio of 0.55%. At the time of writing, its distributing shares have a 12 month trailing yield of 5.4%^[6].

iShares Core Global Aggregate Bond UCITS ETF

So, what if you can’t make up your mind or you just want exposure to as much as possible? The iShares Core Global Aggregate Bond UCITS ETF may be what you’re looking for. 

This bond ETF provides exposure to the global bond market by passively tracking an index composed of investment grade government, government-related, corporate and securitised bonds. 

Government bonds account for roughly half the value of the index’s holdings, of which the US Treasury is by far the largest issuer. The five top issuers in the fund are: 

1. United States Treasury 
2. Government of Japan 
3. Government of Peoples Republic of China 
4. Federal Home Loan Mortgage Corporation 
5. Federal National Mortgage Association 

The fund has net assets totalling $13.4 trillion across share classes and a total expense ratio of 0.10%. At the time of writing, its distributing shares have a 12 month trailing yield of approximately 3.1%^[7].

Bond ETF Advantages and Disadvantages

As with any investment, bond ETFs come with both advantages and disadvantages. Whilst they offer both income potential and diversification, they don’t provide much potential for growth. Below, we’ve highlighted several of the main advantages and disadvantages for investors to consider.

Advantages

• Income Potential: Can provide investors with regular income. 
• Liquidity: Tend to be more liquid than individual bonds. 
• Accessibility: Access to individual bonds on the bond market can be challenging for retail investors; bond ETFs are a more accessible alternative. 
• Lower Cost: Buying individual bonds often requires a large minimum investment, which isn’t typically the case with bond ETFs 
• Diversification: Provide instant diversification across a variety of bonds with a single investment. 

Disadvantages

• Low Growth Potential: Bond ETFs are primarily income focused; they do not provide as much growth potential as stocks or stock ETFs. 
• Interest Rate Sensitivity: Prices move inversely to interest rates. 
• Management Fees: ETFs charge an ongoing management fee (although these are typically quite low). 
• No Maturity Date: Unlike individual bonds, a bond ETF does not have a maturity date at which it returns a fixed principal. This means returns are ultimately based on market conditions when you sell your ETF shares, making returns considerably less predictable than an individual bond which is held to maturity. 

How to Invest in Bond ETFs

So, if you’re interested in adding a bond fund to your portfolio, here’s how you can get started:

1. Register for an investing account and complete the onboarding process 
2. Open your broker’s investing platform 
3. Search for a bond ETF and open the instrument page 
4. Create a new order, enter how many shares you want to buy and click ‘Buy’ to send your order to the market.

Other Articles You Might Be Interested In:

• High Yielding UK Dividend Stocks
• The FTSE 100 vs FTSE 250
• Investing in Mining Stocks

Article Sources: 

• iShares UK Gilts UCITS ETF
• iShares Core GBP Corp Bond UCITS ETF
• iShares EUR High Yield Corp Bond UCITS ETF
• iShares USD Corp Bond UCITS ETF
• iShares US Aggregate Bond UCITS ETF
• SPDR Bloomberg Emerging Markets Local Bond UCITS ETF
• iShares Core Global Aggregate Bond UCITS ETF

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