Best Bond Funds

Are you looking for an alternative investment strategy to increase your financial assets? 

Putting your money behind stocks can be risky and real estate investments can be overpriced for new investors. In such cases, you can consider investing in bond funds to accelerate your monetary growth and secure your financial future. 

What are Bond Funds?

Bond funds are financial investments backed up by bonds rather than stocks. The stock market has thousands of companies listed that are open to trade. But unlike stocks, bond funds offer investors a gamut of companies or multiple bonds in a single trade. Depending on the investment policies, bond funds can consist of government bonds, municipal bonds, corporate bonds and mortgage-backed securities. 

Based on your financial goals, you can invest in bond mutual funds or exchange-traded funds (ETFs) to instantly diversify your stock portfolio. A majority of these types of bond funds track indices that mirror the performance of top companies in the U.S. Bond funds are regularly monitored by professional fund managers to optimize the returns on your investments.    

Best Bond Funds Right Now

Bond funds can create a sustainable and stable source of income for beginners and seasoned investors. There are tons of bond mutual funds and ETFs that you can choose to invest in for short-term and long-term benefits. 

You can buy and sell shares of bond funds at your convenience. The inherent liquidity and frequent market swings can provide plenty of opportunities to earn a regular income from your investments.   

Before investing in bond funds, be sure to evaluate certain factors that can impact your earnings. These factors can include expense ratios, price-to-earnings (P/E) ratios, liquidity, assets under management (AUM) and return rate. 

You can consider investing in these top bond funds to grow your wealth. 

1. Invesco WilderHill Clean Energy ETF (NYSEARCA: PBW)

Invesco WilderHill Clean Energy ETF has been open to trade since 2005. It is composed of U.S. companies that are dedicated to the advancement of cleaner energy and conservation. This ETF tracks the WilderHill Clean Energy Index. Its holding companies are a blend of small-cap, mid-cap and large-cap companies from industrial sectors such as information technology, consumer discretionary, materials, utilities and energy.  

PBW has a 0.7% expense ratio, a yearly range of $24.26 to $138.60 and trades 1.04 million shares daily. It pays a dividend yield of 0.42%, has a 1-year return of 189.89%, a 3-year return of 66.56% and a 5-year return of 42.05%.

Invesco Wilderhill Clean Energy Etf

Historical performance of Invesco WilderHill Clean Energy ETF in the past 5 years.

2. ARK Genomic Revolution ETF (BATS: ARKG)

ARK Genomic Revolution ETF has been listed on the stock exchange since 2014. It concentrates on multi-cap U.S. companies from industrial sectors such as healthcare, energy, automation, manufacturing, materials and transportation. These companies include Invitae Corp., CRISPR Therapeutics AG, Pacific Biosciences of California, Inc., CareDx Inc. and Lovance Biotherapeutics Inc.  

This ETF has an expense ratio of 0.75%. It has a 52-week low of $24 and a 52-week high of $77.48. ARK Genomic Revolution ETF has an annual dividend yield of $2.11 per share. It has AUM of $3,133 million and has high liquidity with an average daily trade volume of 436,083 shares. This ETF has a 1-year return rate of 149.55%, a 3-year return rate of 219.49% and a 5-year return rate of 290.10%. 

Nysearca: Pbw

Historical performance of ARK Genomic Revolution ETF in the past 5 years.

3. ProShares UltraPro QQQ (NASDAQ: TQQQ)

ProShares UltraPro QQQ ETF was launched in 2010. It tracks the NASDAQ-100 index at a 3x return rate. This ETF has holdings in large-cap U.S. companies such as Apple, Microsoft, Amazon.com, Facebook and Alphabet. ProShares UltraPro QQQ ETF is more suited for short-term investors. The leverage on this ETF is reset daily and its compounding return rate can differ drastically compared to non-leveraged ETFs.

The expense ratio of this ETF is 0.95%. It has an annual dividend yield of $0.03 per share. ProShares UltraPro QQQ ETF has high liquidity and trades over 12 million shares per day. It has an AUM of $8,877 million and a 1-year return rate of 94.15%, a 3-year return rate of 222.58% and a 5-year return rate of 622.54%. This ETF has a 52-week low of $32.27 and a 52-week high of $175.67. 

Best Bond Funds Right Now

Historical performance of ProShares UltraPro QQQ in the past 5 years

4. ARK Next Generation Internet ETF (NYSEARCA: ARKW)

ARK Next Generation Internet ETF was founded in 2014. It focuses on U.S. companies that are engaged in cloud computing, mobile networks, artificial intelligence (AI), Internet of Things (IoT) and blockchain. Its asset holdings include large-cap companies such as Tesla, Roku, Square, Spotify and Pure Storage. 

This ETF has an expense ratio of 0.76% and has a P/E ratio of 48.29. ARK Next Generation Internet ETF has a 1-year return rate of 119.81%, a 3-year return rate of 206.17% and a 5-year return rate of 466.58%. It has AUM of $3,152 million and trades more than 587,754 shares per day. ARK Next Generation Internet ETF has a 52-week low of $40.49 and a 52-week high of $127.59.

Best Bond Funds

Historical performance of ARK Next Generation Internet ETF in the past 5 years

5. Direxion Daily Technology Bull 3X Shares (NYSEARCA: TECL)

Direxion Daily Technology Bull 3X Shares ETF has been on the market since 2008. This ETF tracks the Technology Select Sector Index at a 3x return rate. Its asset holdings consist of large-cap U.S. companies such as Apple, Microsoft, NVIDIA, Visa and Mastercard. Short-term investors are more likely to profit from this ETF as its leverage is reset on a daily basis. 

The expense ratio of this ETF is 1.08% and its P/E ratio is 31.17. It has an annual dividend yield of $0.31 per share. Direxion Daily Technology Bull 3X Shares ETF has a 52-week low of $73.98 and a 52-week high of $336.30. It has high liquidity and trades more than 219,924 shares per day. This ETF has a 1-year return rate of 63.73%, a 3-year return rate of 203.49% and a 5-year return rate of 768.07%. Direxion Daily Technology Bull 3X Shares ETF has AUM of $ 1,903 million.

Ark Genomic Revolution Etf

Historical performance of Direxion Daily Technology Bull 3X Shares ETF in the past 5 years.

Best Online Brokers for Bond Funds

An online broker enables you to browse through thousands of bond mutual funds and ETFs. These platforms let you buy and sell shares hassle-free. Most online brokers also let you trade bond funds free of commission. 

You can access historical financial information on stocks and bond funds on these platforms. It also lets you manage your portfolio and provides insights for making the right investment decisions.

Take a look at these online brokers to get started.

Get started securely through Axos Invest’s website
Best For
Sign Up Bonus
N/A
1 Minute Review

It seems like new digital investment management platforms are sprouting up left and right, and for good reason — there’s a great need for easy, straightforward investment management that doesn’t cost an arm and a leg in fees or to get started. If you’re new to investing or an old hat who wants to make the switch to a virtual manager, deciding which features you need can be confusing if not overwhelming.

If you want a no-frills financial management platform, Axos Invest (formerly WiseBanyan) takes a traditional but sophisticated approach to automated online investing.

Best For
  • Traditional investors trying out an automated investor for the first time
  • New investors that want to take a hands-off approach to portfolio management
Pros
  • Straightforward automated investing
  • Relatively low account minimum and automated investing fee
  • A solid roster of available investment account types
Cons
  • Not a stand-out from other services if you’re someone who likes all the bells and whistles with your digital financial platform
  • No direct relationship with a human financial advisor
get started securely through Webull’s website
Best For
Intermediate Traders and Investors
N/A
1 Minute Review

Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit.

Webull is widely considered one of the best Robinhood alternatives.

Best For
  • Active traders
  • Intermediate traders
  • Advanced traders
Pros
  • No account maintenance fees or software platform fees
  • No charges to open and maintain an account
  • Intuitive trading platform with technical and fundamental analysis tools
Cons
  • Does not support trading in mutual funds, bonds or OTC stocks
get started securely through public.com’s website
Best For
Trading Ideas
N/A
1 Minute Review

Public.com is an investing platform that helps people become better investors. Members can build a diverse portfolio of stocks, ETFs, and crypto within a single platform. Ownership unlocks an experience of content and education, contextual to their portfolio, created by an over million strong community of investors, creators, and analysts. 

Public puts investors first and doesn’t sell trades to market makers or take money from Payment for Order Flow (PFOF).

Best For
  • New investors looking to learn how to invest
  • Experienced investors looking to grow even further
  • Building a modern portfolio of stocks, ETFs, and crypto on one platform
Pros
  • Fractional shares and crypto
  • Transparency all around, from public portfolios to company beliefs
  • Supportive, educational community
Cons
  • No investing tools like futures, options, or margins
  • Day-trading is discouraged
  • Mobile app-based platform
get started securely through Interactive Broker’s website
get started securely through Cobra Trading’s website
Best For
Short Selling
N/A
1 Minute Review

Cobra Trading is a direct access broker focused on access to short opportunities and order execution. Cobra has multiple short locate sources, giving traders access to the best short opportunities in the market. Cobra Trading also specializes in offering comprehensive, responsive customer service throughout the trading day. We recommend Cobra Trading to high-volume traders and short sellers.

Best For
  • Short Sellers
  • Day Traders and Scalpers
  • Traders who are tired of using a “Big Broker”
Pros
  • Affordable commissions
  • The DAS Platform
  • Excellent customer service
Cons
  • No trading under 25K
  • Not a self-clearing firm
get started securely through Moomoo’s website
Best For
Active Traders
N/A
1 Minute Review

Moomoo is a commission-free mobile trading app available on Apple, Google and Windows devices. A subsidiary of Futu Holdings Ltd., it’s backed by venture capital affiliates of Matrix, Sequoia, and Tencent (NASDAQ: FUTU). Securities offered by Futu Inc., regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Moomoo is another great alternative for Robinhood. This is an outstanding trading platform if you want to dive deep into smart trading. It offers impressive trading tools and opportunities for both new and advanced traders, including advanced charting, pre and post-market trading, international trading, research and analysis tools, and most popular of all, free Level 2 quotes.

Get started right away by downloading Moomoo to your phone, tablet or another mobile device.

Best For
  • Cost-conscious traders
  • Active and Advanced traders
Pros
  • Over 8,000 different stocks that can be sold short
  • Access trading and quotes in pre-market (4 a.m. to 9:30 a.m. ET) and post-market hours (4 p.m. to 8 p.m. ET)
  • No minimum deposit to open an account.
Cons
  • No phone or chat support
get started securely through Tradier’s website
Best For
Inexpensive Options Trading
N/A
1 Minute Review

Tradier is a high-tech broker made with the most active traders in mind. Tradier differentiates itself by using Application Programming Interface (API) technology to partner with popular trading software to offer a wide range of platform choices to Investors. Tradier brokerage offers integration with one of the widest ranges of platforms we’ve seen, including Esignal, Orion Multi Trader, Stockstotrade, 1Option, Evati, and many, many more. 

Tradier offers 2 pricing options — infrequent traders may want to opt for Tradier’s 0 Stocks and $0.35 per Options contract trading, while very active traders can often save money by opting into Tradier’s $30 monthly all-inclusive option and Equity, which cuts commissions entirely.

Tradier TradeHawk platform is exceptionally impressive, combining intuitive 1-click order placements with a vast range of indicators and charting tools. TradeHawk is also completely compatible with both Apple and Android mobile devices. Though we’d love to see Tradier expand into mutual funds and offer a bit more in the way of educational tools, the broker remains a top choice for advanced traders and those looking for enhanced customization options.

Best For
  • Very active options traders who would benefit from a flat-rate monthly charge instead of per-contract fees.
  • Advanced traders looking for a customizable broker with a wide range of platforms that can be integrated.
  • Prominent options traders get high-quality execution, real-time market data and subscription trading.
Pros
  • Wide range of integrated platforms provide an option for any trader.
  • All-inclusive per-month subscriptions available in lieu of per-contract commissions.
  • Platforms are powered by quality real-time market data and execution.
Cons
  • Newer traders may prefer a platform with fewer integration choices and a more streamlined approach.
  • No online mutual funds currently available.

Bonus Broker: Interactive Brokers

The Bond Marketplace has a vast selection of global fixed income securities. You’ll also enjoy:

  • No mark-up or built in spreads with low, transparent commissions
  • Vast universe of over 1 million bonds globally
  • Use of the Bond Search tool to compare available yields
  • The ability to trade directly with other IBKR clients

IBKR has no mark-ups or built-in spreads and low and fully transparent commissions on bonds.

Advantages of Bond Funds

Here’s why investing in bond funds can be beneficial to your portfolio. 

  • There are hundreds of bond funds backed by government bonds that have limited stock price volatility. These bond funds can be a profitable fit for investors with a low-risk profile. 
  • Bond funds such as mutual funds and ETFs offer instant diversification. You can capture a large chunk of the market with a single trade. 
  • Bond funds are regularly monitored by fund managers. As a result, bond funds are better investment options for passive traders. 
  • Many bond funds can be traded at expense ratios below 1%. The low-cost of buying bond funds make it affordable for new investors.
  • Bond funds reward their shareholders with regular payments as dividends. These dividends are issued monthly, quarterly or annually, making it a reliable source of income.   

Disadvantages of Bond Funds

Although there are several advantages of investing in bond funds, it does not make it less risky. Here’s why investing in bond funds may not be the best financial decision for you. 

  •  Low-risk bond funds come at the cost of low returns. 
  • Earnings from bond funds can have a comparatively higher tax rate. The increased tax margins can significantly decrease profits from your trades.  
  • Bond funds are directly affected by credit interest rates. An increase in credit interest rate can decrease the price of individual bonds. Bond funds with longer maturity durations are prone to inflation.   

Build a Better Portfolio with Bond Funds

Investing in bond funds can broaden the horizons of your portfolio at a margin of the cost. Based on your trading tactics, bond funds also offer investors a mix of multi-cap companies from various industrial verticals to invest in.    

Turn to Webull

0 Commissions and no deposit minimums. Everyone gets smart tools for smart investing. Webull supports full extended hours trading, which includes full pre-market (4:00 AM - 9:30 AM ET) and after hours (4:00 PM - 8:00 PM ET) sessions. Webull Financial LLC is registered with and regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). It is also a member of the SIPC, which protects (up to $500,000, which includes a $250,000 limit for cash) against the loss of cash and securities held by a customer at a financially-troubled SIPC-member brokerage firm.