Posted on by Micah McDonald

5 Best U.S. Intermediate Term Bond ETFs to Own Long-Term: BIV vs MUB vs MUNI vs CMBS vs SPAB 1.7

  • Asset Category: Intermediate Term Bonds (U.S. Intermediate Term Treasuries)

  • Long-Term Performance: 6.35% CAGR

  • Correlation to U.S. markets: 0.08

  • S&P 500 Performance (US Large Cap Blend): 10.50% CAGR

  • Back test timeframe: January 1972 – July 2023

  • Oldest Intermediate Term Bond ETF back tested: iShares Core U.S. Aggregate Bond ETF (AGG)

  • Long-Term Performance: 2.90% CAGR

  • Correlation to U.S. markets: 0.17

  • S&P 500 Performance: 10.07% CAGR

  • Back test timeframe: October 2003 – July 2023

  • Number of ETFs available in this asset class: 107

  • Number of ETFs in this asset class that are 10 years old or older: 18

U.S. Intermediate Bonds vs U.S. Large Cap Blend Equities: January 1972 – July 2023

AGG vs SPY: October 2003 – July 2023

AGG vs SPY: September 26, 2003 – August 25, 2023

The Deep Value ETF Accumulator rankings for the 18 oldest Intermediate Term Bond ETFs: 

The 5 top ranked Intermediate Term Bond ETFs head-to-head comparisons: 

BIV vs MUB vs MUNI vs CMBS vs SPAB: March 2012 – July 2023

BIV vs MUB vs MUNI vs CMBS vs SPAB: February 16, 2012 – August 25, 2023

Stated objectives of top 5 ranked Intermediate Term Bond ETFs:

BIV – Vanguard Intermediate-Term Bond ETF. Seeks to track the investment return of the Bloomberg U.S. 5–10 Year Government/Credit Float Adjusted Index, a market-weighted bond index that covers investment-grade bonds with a dollar-weighted average maturity of 5 to 10 years. Invests in U.S. government high-quality (investment grade) corporate and investment-grade international dollar-denominated bonds. Passively managed, using index sampling.

MUB – The iShares National Muni Bond ETF seeks to track the investment results of an index composed of investment-grade U.S. municipal bonds. Exposure to a broad range of U.S. municipal bonds. Access to 2000+ municipal bonds in a single fund. Use to seek tax-exempt income. Effective March 1, 2016, MUB changed its fund name from the iShares National AMT-Free Muni Bond ETF to the iShares National Muni Bond ETF.

MUNI – The PIMCO Intermediate Municipal Bond Active Exchange-Traded Fund is an actively managed exchange-traded fund (ETF). Designed for investors seeking tax-exempt income, the fund consists of a diversified portfolio of primarily intermediate duration, high credit quality bonds, which carry interest income that is exempt from federal tax and in some cases state tax. With this fund, investors will see the names of the bonds owned daily. In the municipal bond market, we believe issuer specific credit analysis is critical. Unlike index funds that typically rely solely on a rating agency for credit analysis, PIMCO applies extensive research on each municipal bond we own in the fund. We believe it is imperative to analyze each issuer, both at purchase and on an ongoing basis, to avoid what we feel are municipalities of deteriorating credit quality in our efforts to preserve investors’ capital. Active management not only enables the fund to invest in only the issuers and securities we like, but also allows us to change the portfolio structure should credit conditions change. In addition, active management allows for management of capital gains and losses, working to minimize the tax effect of gains, while harvesting losses when available.

CMBS – The iShares CMBS ETF seeks to track the investment results of an index composed of investment-grade commercial mortgage-backed securities. Exposure to U.S. commercial mortgage-backed bonds. Targeted access to a specific segment of the domestic mortgage-backed bond market. Use to seek income.

SPAB – The SPDR® Portfolio Aggregate Bond ETF seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Bloomberg U.S. Aggregate Bond Index (the “Index”). One of the low cost core SPDR® Portfolio ETFs, a suite of portfolio building blocks designed to provide broad, diversified exposure to core asset classes. A low cost ETF that seeks to offer comprehensive exposure to US dollar denominated investment grade bonds including government bonds, corporate bonds, mortgage pass-through securities, commercial mortgage backed securities and asset backed securities. Index is market cap weighted and reconstituted on the last business day of the month.

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Respectfully yours, Micah McDonald, aka the Deep Value ETF Accumulator

Disclosure: We currently own shares of BIV and intend to buy more shares in the future. I am not a professional investment advisor. Please perform your own due diligence or seek the advice of a Registered Investment Advisor before investing in any security mentioned in this article. This website contains affiliate links to Google AdSense.