FP_092817_cover
Compared with the U.S. government bond market, there are options for potentially stronger fixed-income returns — from the corporate world.

We reviewed all corporate bond funds with more than $500 million in assets and ranked them by their three-year returns. The average was 3.89%, higher than the returns from government bonds, of course, since there is more risk involved. While government debt carries interest rate and inflation risk, corporate bonds also carry default and downgrade risk. That means greater potential for losses. In the past decade, government bond funds tended to have just one down year, compared with two for many corporate bond funds.

Since corporate bonds are pegged to an underlying issuer, their risk/reward balance behaves more like stocks. Indeed, equities carry the most risk since they're lowest on the capital structure, and offer the highest potential rewards — 8% over the past three years, as measured by the S&P 500.

To qualify for our list, these portfolios must hold more than 65% of their assets in corporate bonds, less than 40% in foreign bonds and less than 35% in high-yield bonds. All data from Morningstar Direct.
FP_092817_20

20. SPDR Blmbg Barclays IntmTermCorpBd ETF (ITR)

3-Yr. Returns: 2.93%
5-Yr. Returns: 2.93%
Expense Ratio: 0.12%
Total Assets (millions): $2,249
FP_092817_19

19. Guggenheim BulletShrs 2021 Corp Bd ETF (BSCL)

3-Yr. Returns: 3.11%
5-Yr. Returns: N/A
Expense Ratio: 0.24%
Total Assets (millions): $760
FP_092817_18

18. Lord Abbett Income A (LAGVX)

3-Yr. Returns: 3.18%
5-Yr. Returns: 4.42%
Expense Ratio: 0.90%
Total Assets (millions): $925
FP_092817_17

17. USAA Intermediate-Term Bond (USIBX)

3-Yr. Returns: 3.21%
5-Yr. Returns: 4.01%
Expense Ratio: 0.63%
Total Assets (millions): $1,974
FP_092817_16

16. iShares US Credit Bond ETF (CRED)

3-Yr. Returns: 3.27%
5-Yr. Returns: 3.19%
Expense Ratio: 0.15%
Total Assets (millions): $1,541
FP_092817_15

15. T. Rowe Price Corporate Income (PRPIX)

3-Yr. Returns: 3.33%
5-Yr. Returns: 3.80%
Expense Ratio: 0.62%
Total Assets (millions): $883
FP-092817_14

14. Guggenheim BulletShrs 2022 Corp Bd ETF (BSCM)

3-Yr. Returns: 3.466%
5-Yr. Returns: N/A
Expense Ratio: 0.24%
Total Assets (millions): $598
FP_092817_13

13. MFS Corporate Bond (MFBFX)

3-Yr. Returns: 3.467%
5-Yr. Returns: 3.59%
Expense Ratio: 0.81%
Total Assets (millions): $1,671
FP_092817_12

12. Vanguard Interm-Term Inv Grde (VFIDX)

3-Yr. Returns: 3.49%
5-Yr. Returns: 3.29%
Expense Ratio: 0.10%
Total Assets (millions): $26,180
FP_092817_11

11. iShares iBoxx Inv Grade Corp Bd ETF (LQD)

3-Yr. Returns: 3.61%
5-Yr. Returns: 3.78%
Expense Ratio: 0.15%
Total Assets (millions): $38,632
FP_092817_10

10. Fidelity Corporate Bond (FCBFX)

3-Yr. Returns: 3.69%
5-Yr. Returns: 3.73%
Expense Ratio: 0.45%
Total Assets (millions): $988
FP_092817_09

9. JPMorgan Corporate Bond (CBFVX)

3-Yr. Returns: 3.79%
5-Yr. Returns: N/A
Expense Ratio: 0.41%
Total Assets (millions): $1,798
FP_092817_08

8. BNY Mellon Corporate Bond (BYMMX)

3-Yr. Returns: 3.80%
5-Yr. Returns: 3.70%
Expense Ratio: 0.56%
Total Assets (millions): $784
FP_092817_07

7. Vanguard Interm-Term Corp Bd (VICSX)

3-Yr. Returns: 3.90%
5-Yr. Returns: 3.87%
Expense Ratio: 0.07%
Total Assets (millions): $1,014
FP_092817_06

6. Invesco Corporate Bond A (ACCBX)

3-Yr. Returns: 4.07%
5-Yr. Returns: 4.58%
Expense Ratio: 0.90%
Total Assets (millions): $1,003
FP_092817_05

5. iShares 10+ Year Credit Bond ETF (CLY)

3-Yr. Returns: 4.69%
5-Yr. Returns: 4.41%
Expense Ratio: 0.20%
Total Assets (millions): $822
FP_092817_04

4. Pimco Inv Grade Corp (PBDPX)

3-Yr. Returns: 4.78%
5-Yr. Returns: 4.82%
Expense Ratio: 0.61%
Total Assets (millions): $2,429
FP_092817_03

3. Vanguard Long-Term Corporate Bd ETF (VCLT)

3-Yr. Returns: 5.06%
5-Yr. Returns: 4.93%
Expense Ratio: 0.07%
Total Assets (millions): $2,098
FP_092817_02

2. SEI Long Duration Credit (SLDAX)

3-Yr. Returns: 5.16%
5-Yr. Returns: 5.12%
Expense Ratio: 0.37%
Total Assets (millions): $3,752
FP_092817_01

1. Vanguard Long-Term Inv Grade (VWETX)

3-Yr. Returns: 5.71%
5-Yr. Returns: 5.21%
Expense Ratio: 0.11%
Total Assets (millions): $11,526
MORE FROM FINANCIAL PLANNING