As for interest-paying ETFs, one could consider the following:
- iShares Barclays 1-3 Yr Treasury Bond (SHY), which yields 1.23% and primarily holds bonds with a AAA rating
- Vanguard Short-Term Bond ETF (BSV), which yields 2.39% and allocates nearly 76% of its assets to bonds with a AAA rating, giving investors a little more return for risk
- iShares Barclays 20+ Treas Bond (TLT), which boasts a yield of 3.75% and primarily holds bonds with a AAA rating. This is more of a long-term play on deflation, but generates a healthy stream of income.
Written by Kevin Grewal in Houston.