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Bond ETFs That Have Gained Investors' Love to Start 2023

ETFs pulled in $9.3 billion in capital during the first week of 2023. U.S. fixed-income ETFs led the way higher with $9.4 billion in inflows, closely followed by $2.1 billion in international fixed-income ETF, per etf.com. U.S. equity ETFs saw outflows of $2.7 billion.

As such, iShares Core U.S. Aggregate Bond ETF AGG, iShares iBoxx USD High Yield Corporate Bond ETF HYG, iShares 0-3 Month Treasury Bond ETF SGOV, iShares 20+ Year Treasury Bond ETF TLT and SPDR Bloomberg 1-3 Month T-Bill ETF BIL dominated the top creation list last week.

The rotation from stocks to bonds came on the back of recession fears and investors are seeing bonds as safer investments during economic downturns. As the global economy is struggling with skyrocketing inflation, the continued war in Ukraine and a slowdown in China, a recession seems likely this year (read: 5 Most-Loved ETFs of 2022).

The International Monetary Fund warned that a third of the global economy would be in a recession given no signs of abatement of the ongoing conflict in Ukraine, spiraling inflation, higher interest rates and a surge in coronavirus infections in China. The year 2023 would be "tougher" than last year as the United States, European Union and China may see their economies slow down.

Per a Wall Street Journal survey, there is a 63% chance of recession this year. And a survey of economists and investors by the Federal Reserve Bank of Philadelphia shows the expectations that the gross domestic product will fall in three or four quarters are by far the highest since it started in 1968. Big banks are also expecting that an economic downturn is fast approaching. More than two-thirds of the economists at 23 large financial institutions that do business directly with the Federal Reserve are betting that the United States will face a recession in 2023.

We have detailed the ETFs below:

iShares Core U.S. Aggregate Bond ETF (AGG)

iShares Core U.S. Aggregate Bond ETF is the top asset creator, pulling in $1.3 billion in capital. It offers broad exposure to U.S. investment-grade bonds by tracking the Bloomberg US Aggregate Bond Index. iShares Core U.S. Aggregate Bond ETF holds 10,621 securities in its basket with an average maturity of 8.71 years and an effective duration of 6.37 years (read: A Guide to the 25 Cheapest ETFs).

iShares Core U.S. Aggregate Bond ETF has AUM of $84.5 billion and an average daily volume of 7.8 million shares. It charges 3 bps in annual fees.

iShares iBoxx USD High Yield Corporate Bond ETF (HYG)

iShares iBoxx $ High Yield Corporate Bond ETF has accumulated $1.2 billion in capital. It offers exposure to a broad range of U.S. high-yield corporate bonds by tracking the Markit iBoxx USD Liquid High Yield Index.

iShares iBoxx $ High Yield Corporate Bond ETF is one of the most widely used high-yield bond ETFs with AUM of $16.9 billion and an average daily volume of 33.2 million shares. HYG charges 48 bps in annual fees and has a Zacks ETF Rank #4 (Sell) with a High-risk outlook.

iShares 0-3 Month Treasury Bond ETF (SGOV)

iShares 0-3 Month Treasury Bond ETF accumulated around $1.1 billion in its asset base last week. It offers exposure to U.S. Treasury bonds with remaining maturities less than or equal to three months. iShares 0-3 Month Treasury Bond ETF follows the ICE 0-3 Month US Treasury Securities Index with average maturity and effective duration of 0.12 years.

iShares 0-3 Month Treasury Bond ETF has AUM of $7.5 billion and trades in an average daily volume of 1.6 million shares. SGOV charges 5 bps in annual fees and has a Zacks ETF Rank #3 (Hold).

iShares 20+ Year Treasury Bond ETF (TLT)

iShares 20+ Year Treasury Bond ETF gathered $844.5 million in capital. It provides exposure to long-term Treasury bonds by tracking the ICE U.S. Treasury 20+ Year Bond Index. iShares 20+ Year Treasury Bond ETF holds 34 securities in its basket and charges 15 bps in annual fees. It has an average maturity of 25.64 years and an effective duration of 17.63 years.

TLT is one of the most popular and liquid ETFs in the bond space, with AUM of $28.6 billion and an average daily volume of 19.8 million shares. iShares 20+ Year Treasury Bond ETF has a Zacks ETF Rank #4 with a High risk outlook.

SPDR Bloomberg 1-3 Month T-Bill ETF (BIL)

SPDR Bloomberg 1-3 Month T-Bill ETF saw an inflow of $686 million last week. It seeks to provide exposure to zero-coupon U.S. Treasury securities with a remaining maturity of 1-3 months. It follows the Bloomberg 1-3 Month U.S. Treasury Bill Index, holding 19 securities in its basket. Both average maturity and adjusted duration come in at 0.14 years each (read: Hedge Against Rising Rates With Ultra-Short Bond ETFs).

SPDR Bloomberg 1-3 Month T-Bill ETF has AUM of $27.2 billion and an average daily volume of 6.4 million shares. It charges 13 bps in annual fees and has a Zacks ETF Rank #3 with a Medium-risk outlook.

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iShares 20 Year Treasury Bond ETF (TLT): ETF Research Reports

iShares iBoxx High Yield Corporate Bond ETF (HYG): ETF Research Reports

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iShares Core U.S. Aggregate Bond ETF (AGG): ETF Research Reports

SPDR Bloomberg 13 Month TBill ETF (BIL): ETF Research Reports

iShares 03 Month Treasury Bond ETF (SGOV): ETF Research Reports

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