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Top 10 Corporate Bond ETFs: Pros vs. Cons


3. SPDR Barclays Capital Intermediate-Term Bond ETF (ITR) tracks the Barclays Capital Intermediate U.S. Corporate Index. The index includes dollar-denominated debt from U.S. and non-U.S. industrial utility and financial institutions with less than 10 year durations. AUM equals $183 million and the average daily trading volume is roughly 37,000 shares. The expense ratio is .15%.

Through May 2011, ITR has returned 2.7% and currently yields 3.5%

ITR Top Ten Holdings

  1. General Electric Cap Corp 4.8%: 1.43%
  2. Goldman Sachs Group 5.95%: 1.15%
  3. JP Morgan Chase 4.65%: 1.04%
  4. Morgan Stanley 3.45%: 0.96%
  5. American Express 7.25%: 0.91%
  6. Verizon Comms 5.25%: 0.90%
  7. Wachovia Corp Global 5.5%: 0.88%
  8. Merrill Lynch Co Inc 6.875%: 0.84%
  9. Morgan Stanley 4.75%: 0.83%
  10. Citigroup 5.5%: 0.83%

2. Vanguard Long-Term Corporate Bond ETF (VCLT) tracks the Barclays Capital U.S. Long Corporate Index, which is investment grade, dollar-denominated, with maturities greater than 10 years. AUM equal $104 million and average daily trading volume is roughly 13,000 shares. Typical for Vanguard, the expense ratio is a low .15%.

Through May 2011, VCLT has returned 2.95% and has a current yield of 5.34%.

VCLT Top Ten Holdings

  1. General Electric Capital Corp 5.875%: 1.74%
  2. News America 6.15%: 1.39%
  3. Time Warner Companies 6.625%: 1.34%
  4. Comcast Corp New 6.95%: 1.29%
  5. Verizon Communications 6.9%: 1.18%
  6. SBC Communications 6.15%: 1.16%
  7. Kraft Foods 6.5%: 1.08%
  8. HSBC Holdings 6.8%: 1.04%
  9. UnitedHealth Group 6.875%: 0.99%
  10. Goldman Sachs Group 6.75%: 0.99%

1. PIMCO Investment Grade Corporate Bond ETF (CORP) tracks the Bank of America/Merrill Lynch U.S. Corporate Index with dollar-denominated investment grade issues with maturities greater than one year. CORP is a relatively new issue (September 2010) and has AUM of $83 million, with average daily trading volume of around 6,000 shares. The expense ratio is .20%. A feature is, CORP rebalances its holdings monthly, which should be a tax consideration for some investors.

Holdings for CORP are unavailable at this time.

Through May 2011, it has returned 1.72% and, per PIMCO's Web site , the current 30-day yield is 3.57%.

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