3 Promising Bond ETFs to Keep an Eye On

Lan Anh Tran: Long gone are the days where ETFs are synonymous with broad market passive strategies. The SEC ETF rule in 2019 widened ETFs’ operational flexibility and made the ETF a practical wrapper for a vast array of strategies. Active bond ETFs have been a notable beneficiary of these developments. Investors can now easily access active fixed-income managers while enjoying ETFs’ trading convenience and transparency. This new crop of bond ETFs also tends to bear lower fees than mutual funds, making them formidable competition for traditional bond strategies.

If you’re looking for a new addition to your fixed-income sleeve, here are three promising bond ETFs that do more than your typical index fixed-income fund.

3 Promising Bond ETFs to Keep an Eye On

1. iShares Total Return Active ETF BRTR
2. Dimensional Core Fixed Income ETF DFCF
3. DoubleLine Opportunistic Core Bond ETF DBND

First up is Gold-rated iShares Total Return Active ETF, ticker BRTR. When you might know them for their passive ETF empire, iShares is making steady inroads into the active domain. BRTR leverages BlackRock’s active fixed-income organization, one of the strongest in the industry, as well as their expansive swath of supporting functions.

Industry veteran Rick Rieder leads up the fixed-income group here and oversees this fund alongside lead manager Chi Chen. This team has seen some reshuffling in recent years, but has no shortage of experience, as all named PMs are long-standing members of the fixed-income organization at BlackRock.

The managers make top-down sector allocation and interest rate calls, as well as determine the fund’s risk budget. They leverage BlackRock’s research capabilities to identify major market trends and utilize BlackRock’s Aladdin to timely and precisely manage portfolio risk. The ETF taps into BlackRock’s well-resourced teams of sector specialists for fundamental research and security selection at the sector level, ensuring both breadth and depth of market expertise.

This portfolio’s flexible mandate served it well this year. BRTR outpaced the category average and category index by 45 and 49 basis points between January and August 2025, respectively. The mutual fund sibling’s longer track record has been solid since lead manager Rick Rieder took over in 2010 as well, beating both benchmarks on an absolute and risk-adjusted basis.

Next up, Dimensional Core Fixed Income ETF, DFCF, which attempts to outperform the market by systematically positioning its duration and credit risk profile.

While prices do most of the heavy lifting in these strategies, the managers use current prices to calculate an expected return for each eligible bond. They pursue those with the best return potential within a set of constraints, which will shape the fund’s duration and geographical positioning. The strategy generally tilts toward shorter-term bonds when the yield curve is flat or inverted.

The fund also takes a systematic approach to credit risk. The managers adjust bond credit ratings to reflect market opinions using price, market yields, and credit default swaps. They stick to investment-grade bonds but steer the fund toward lower-rated bonds when credit spreads widen and higher-rated bonds when credit spreads tighten. Compressed credit spreads throughout 2024 kept its allocation to BBB rated bonds above that of the category index. The fund outperformed the index by 71 basis points between January and November of 2024.

Constraints keep the fund composition close to the Bloomberg US Aggregate Bond Index, including duration, industry, and issuer-level thresholds. The ETF also employs a flexible trading philosophy, which adds to its edge. Traders choose bonds with the lowest trading costs from a basket of eligible bonds with similar characteristics.

These features, combined with an affordable 17-basis-point annual fee, helped DFCF outpace its category index and category average between its November 2021 inception and August 2025. Its risk-adjusted returns were better than both benchmarks over this period.

And last but not least, Bronze-rated DoubleLine Opportunistic Core Bond ETF, ticker DBND. This ETF is a core-plus bond offering from veteran duo Jeffrey Gundlach and Jeffrey Sherman. Both lead managers have decades of industry experience and leverage strong teams of sector specialists who are deeply involved in the ETF’s daily activities. And sector expertise is where this portfolio shines.

The ETF’s process starts with DoubleLine’s monthly asset-allocation committee, where the firm decides high-level guidelines for sector allocation, duration, and risk. Teams of sector portfolio managers then contribute bottom-up security research and select their best sector picks to build out the portfolio. This ETF often favors securitized and emerging-market debts, strong areas of expertise for the sector managers. Unlike many peers that focus on opportunities and corporate debts, DBND’s nearly 50% stake in securitized bonds holds the largest sway over its return, and is an overweight compared to the category average. While the managers might take on more sector bets, the ETF duration tends to hug that of the average peer and the broader bond market.

This process has led to strong results so far. The ETF outpaced the category index by 57 basis points annually between its March 2022 inception and August 2025, with lower volatility. 2022 was a bright spot thanks to the fund’s shorter duration, and the ETF’s good credit risk reduction also paid off in 2024.

Watch 3 Great Bond ETFs That Do Things Differently for more from Lan Anh Tran.