Fixed-income investments are getting a lot of attention because they offer good returns and the stock market is uncertain. They give steady income and usually don’t have big price changes, which many investors like. If you want to put more money into fixed income, here are six good funds to think about.

Why Invest in Fixed Income Funds?

Fixed-income investments help make your portfolio more balanced. The best ones give steady income without big ups and downs in price. They help keep your overall investments more stable when you also have stocks that aim for growth.

Funds make it easy to invest in fixed income. They hold many different bonds, often with different times to pay back and from different companies or governments. This helps spread out risk.

How We Picked These Fixed Income Funds

We chose the best funds by looking for these features:

  • Maturity between 2 and 7 years: This time frame balances risk and reward well.

  • Five-star Morningstar ratings: This means the fund has done better than most others in terms of risk and return.

  • No minimum investment: Some funds need a lot of money to start, but these don’t.

  • Low fees (expense ratio 0.25% or less): Lower fees mean you keep more of your returns.

  • No sales fees (no load): Some funds charge extra when you buy or sell, but these don’t.

We looked at both mutual funds and ETFs, but the best ones were all ETFs.

6 Great Fixed Income Funds to Help Diversify Your Portfolio

Below is a list of six fixed-income ETFs that have mid-length maturities, low fees, and strong performance. They are listed from the lowest to the highest fee.

1. SPDR Portfolio Intermediate Term Corporate Bond ETF (SPIB)

  • Price per share: $33.02

  • Fees: 0.04%

  • Monthly income: About $0.05 per share

  • Average bond length: 4.88 years

About SPIB: This fund invests in medium-term bonds from big companies in industries like banks, utilities, and others. These bonds have a fixed interest rate.

Why SPIB is good: It holds about 5,000 different bonds, so it’s very spread out and safe. Top companies in the fund include Goldman Sachs, Bank of America, and Amazon. The bonds are mostly high-quality, meaning low risk. The fund pays about 4.95% yearly interest and gives monthly payouts between $0.10 and $0.12 per share since early 2024.

2. VanEck IG Floating Rate ETF (FLTR)

  • Price per share: $25.43

  • Fees: 0.14%

  • Monthly income: About $0.05 per share

  • Average bond length: 3.12 years

About FLTR: This fund invests in bonds with changing interest rates from companies around the world.

Why FLTR is good: Because the interest rates change regularly, this fund protects you if interest rates go up. It has bonds from places like the UK, Australia, and Japan, which helps spread risk. Most bonds are from financial companies, which can be good or bad depending on what else you own. The fund pays monthly, between $0.09 and $0.14 per share over the past 18 months.

3. iShares 3-7 Year Treasury Bond ETF (IEI)

  • Price per share: $117.35

  • Fees: 0.15%

  • Monthly income: About $0.04 per share

  • Average bond length: 4.74 years

About IEI: This fund invests in U.S. government bonds that last between 3 and 7 years. It is safer than funds that invest in company bonds.

Why IEI is good: Even though the U.S. credit rating has been lowered recently, government bonds are still considered safe and pay decent interest. The fund gives monthly payouts from $0.28 to $0.34 per share.

4. Janus Henderson AAA CLO ETF (JAAA)

  • Price per share: $50.61

  • Fees: 0.20%

  • Monthly income: About $0.05 per share

  • Average bond length: 4.41 years

About JAAA: This fund invests in special loans called CLOs, which are groups of company loans bundled together. The loans have different risk levels, and this fund focuses on the safest part.

Why JAAA is good: It offers higher interest because it invests in loans with floating rates. It’s more complex but gives a good return, about 5.9% yearly average over 3 years. Monthly payments have ranged from $0.20 to $0.27 per share.

5. Eaton Vance Short Duration Income ETF (EVSD)

  • Price per share: $50.86

  • Fees: 0.24%

  • Monthly income: About $0.05 per share

  • Average bond length: 2.48 years

About EVSD: This fund invests in many types of short-term bonds, including government, company, and mortgage-backed bonds.

Why EVSD is good: It focuses on safer bonds but also includes some higher-yield bonds to boost returns. About 30% of the fund is in mortgage-backed bonds. Monthly payouts range from $0.18 to $0.24 per share.

6. iShares CMBS ETF (CMBS)

  • Price per share: $47.89

  • Fees: 0.25%

  • Monthly income: About $0.04 per share

  • Average bond length: 4.55 years

About CMBS: This fund invests in bonds backed by commercial real estate, like office buildings and hotels.

Why CMBS is good: These bonds usually pay more interest than government or company bonds. The fund mainly holds safer AAA and AA rated bonds, making it a good option for steady income. Monthly payouts have been $0.11 to $0.14 per share.

Summary

Bond funds can provide regular income and help balance your investments. Some funds are simple and safer, while others are more complex but offer higher returns. If you’re new to bond investing, start with safer funds before trying more complex ones.

Published: 28th May 2025

For more such articles, please follow us on Twitter, Linkedin & Instagram

Also Read:

Inflation Trends in 2025: Where Are Prices Headed?
ChatGPT Ideas and AI Tips for Writing Great Emails
Fintech Trends Reshaping the Finance Sector This Year