What is a bond ETF?

A bond ETF is an ETF that holds bonds such as Treasuries, corporate bonds, municipals, or high-yield bonds. It trades on an exchange intraday like other ETFs.

Bond ETFs often distribute interest income, and their prices move based on interest rates and credit conditions. Longer-duration bond ETFs are usually more sensitive to rate changes.

When choosing a bond ETF, look at duration, credit quality, and what segment of the bond market it targets. Two "bond ETFs" can behave very differently depending on whether they hold short Treasuries or long high-yield bonds.