The Best European Bond ETFs to Add to Your Portfolio Today (2024)

Find out which European bond ETFs are performing the best and why they should be on your radar as an investor.

European bond exchange-traded funds (ETFs) have gained significant attention from investors seeking exposure to debt securities issued by governments of European countries. These ETFs offer diversification, liquidity, and cost-effective access to the European bond market, making them an attractive option for investors looking to balance their portfolios with fixed income assets. In this article, we will explore the 50 best European bond ETFs, as well as expert quotes and opinions on the outlook and challenges faced by these investment instruments.

Read More: Best European Natural Gas ETFs

Insights and Perspectives on European Bond ETFs:

Expert opinions shed light on the various factors influencing European bond ETFs. Here are some key insights and perspectives:

Impact of the Russia-Ukraine Conflict on Energy Prices and Security:

The fundamentals of the euro area economy remain strong, but there's great uncertainty following Russia's recent invasion of Ukraine. EU countries buy a significant portion of their gas and oil from Russia, and energy prices could skyrocket if the conflict disrupts the supply. This geopolitical risk has the potential to impact European bond markets and investor sentiment. - Investopedia

Role of the ECB in Supporting the Eurozone Economy and Keeping Bond Yields Low:

The ECB has been buying up substantial amounts of government debt to keep borrowing costs low for eurozone countries and support the post-pandemic recovery. While this has provided stability to the bond market, it has also pushed down bond yields, making it challenging for investors to find attractive returns in the fixed income market. - Investopedia

Prospects of the EU Recovery and Growth in 2022 and 2023:

The EU economy is projected to grow by 4.0% in 2022 and 2.8% in 2023. Amid the Ukraine war, the European Commission has agreed to ease its financial support of the euro zone economy in 2023. However, uncertainties remain, and some investors expect that there might be room for decreasing interest rates later this year. - Investopedia

Regulatory Changes and Reforms Affecting the European Bond Market:

The ECB's policies have created challenges for investors seeking attractive yields. Moreover, the European bond market is experiencing regulatory changes that impact the overall trading landscape. Investors must be cautious and adapt to evolving market conditions. - justETF

Liquidity Issues and Trading Costs of European Bond ETFs:

While European bond ETFs offer diversification benefits, they may face liquidity issues and higher trading costs compared to larger and more liquid markets. Investors should carefully consider these factors before investing in such funds. - justETF

Read More: Accumulating ETFs vs Distributing ETFs

The Best European Bond ETFs:

According to insights from Investopedia and justETF, some of the best-performing European bond ETFs include:

  • Franklin Liberty International Aggregate Bond ETF (FLIA)

  • iShares 1–3 Year International Treasury Bond ETF (ISHG)

  • SPDR Bloomberg Short Term International Treasury Bond ETF (BWZ)

These ETFs have sizable allocations of European treasury bonds, with their top holdings being German bunds, bonds issued by the government of Sweden, and bonds issued by the government of Japan, respectively. However, it is important to note that they have underperformed the broad U.S. equity market over the past year, as measured by the S&P 500 index.

Read More: Best European Bank ETFs

The Top 50 Bond Indices for ETFs in 2023:

Additionally, justETF highlights the best 50 bond indices for ETFs in 2023, which offer various investment focuses such as convertible bonds, emerging markets bonds, inflation-linked bonds, and more. Some of the indices delivering positive returns over the past month and year include:

  • Refinitiv Qualified Global Convertible (EUR Hedged)

  • JP Morgan Emerging Markets Multi-Factor Enhanced Local Currency Bond

  • MTS Mid Price Italy 10y Target Maturity (EUR)

  • PIMCO Emerging Markets Advantage Local Currency Bond

  • Bloomberg Euro Government Inflation-Linked 10+ Year

Here are some details on the top 50 dividend-yielding ETFs based on these indices:

  1. UBS ETF (LU) Bloomberg TIPS 10+ UCITS ETF (USD) A-dis -

    1. Dividend Yield: 9.14%

    2. Dividend Yield (1 year): 7.04%

    3. Return (1 year): 0.10%

  2. UBS ETF (LU) Bloomberg Euro Inflation Linked 10+ UCITS ETF (EUR) A-dis

    1. Dividend Yield: 9.12%

    2. Dividend Yield (1 year): 7.89%

    3. Return (1 year): 7.04%

  3. UBS ETF (LU) Bloomberg TIPS 10+ UCITS ETF (hedged to GBP) A-dis

    1. Dividend Yield: 9.12%

    2. Dividend Yield (1 year): 7.34%

    3. Return (1 year): 6.77%

  4. UBS ETF (LU) Bloomberg Euro Inflation Linked 1-10 UCITS ETF (EUR) A-dis

    1. Dividend Yield: 7.41%

    2. Dividend Yield (1 year): 6.73%

    3. Return (1 year): 2.42%

  5. SPDR Bloomberg US TIPS UCITS ETF

    1. Dividend Yield: 7.31%

    2. Dividend Yield (1 year): 6.06%

    3. Return (1 year): -1.57%

  6. Invesco AT1 Capital Bond UCITS ETF Dist

    1. Dividend Yield: 7.28%

    2. Dividend Yield (1 year): 5.95%

    3. Return (1 year): -8.15%

  7. UBS ETF (LU) Bloomberg TIPS 1-10 UCITS ETF (USD) A-dis

    1. Dividend Yield: 7.27%

    2. Dividend Yield (1 year): 6.08%

    3. Return (1 year): -2.00%

  8. Invesco AT1 Capital Bond UCITS ETF EUR Hedged Dist

    1. Dividend Yield: 7.03%

    2. Dividend Yield (1 year): 6.09%

    3. Return (1 year): -5.97%

  9. Invesco AT1 Capital Bond UCITS ETF GBP Hedged Dist

    1. Dividend Yield: 6.89%

    2. Dividend Yield (1 year): 5.92%

    3. Return (1 year): -2.07%

  10. iShares Broad USD High Yield Corporate Bond UCITS ETF USD (Dist)

    1. Dividend Yield: 6.76%

    2. Dividend Yield (1 year): 6.12%

    3. Return (1 year): 2.82%

  11. SPDR Bloomberg SASB U.S. High Yield Corporate ESG UCITS ETF Dist USD

    1. Dividend Yield: 6.61%

    2. Dividend Yield (1 year): 6.05%

    3. Return (1 year): 2.26%

  12. Invesco US High Yield Fallen Angels UCITS ETF Dist

    1. Dividend Yield: 6.59%

    2. Dividend Yield (1 year): 5.85%

    3. Return (1 year): 0.46%

  13. UBS ETF (LU) Bloomberg USD Emerging Markets Sovereign UCITS ETF (USD) A-dis

    1. Dividend Yield: 6.33%

    2. Dividend Yield (1 year): 6.00%

    3. Return (1 year): 2.20%

  14. Xtrackers USD High Yield Corporate Bond UCITS ETF 1D

    1. Dividend Yield: 6.33%

    2. Dividend Yield (1 year): 5.72%

    3. Return (1 year): 2.57%

  15. WisdomTree AT1 CoCo Bond UCITS ETF USD Hedged

    1. Dividend Yield: 6.26%

    2. Dividend Yield (1 year): 5.27%

    3. Return (1 year): -6.54%

  16. WisdomTree AT1 CoCo Bond UCITS ETF

    1. Dividend Yield: 6.16%

    2. Dividend Yield (1 year): 5.29%

    3. Return (1 year): -5.51%

  17. iShares USD High Yield Corporate Bond ESG UCITS ETF USD (Dist)

    1. Dividend Yield: 6.13%

    2. Dividend Yield (1 year): 5.51%

    3. Return (1 year): 2.22%

  18. UBS ETF (LU) Bloomberg USD Emerging Markets Sovereign UCITS ETF (hedged to GBP) A-dis

    1. Dividend Yield: 6.13%

    2. Dividend Yield (1 year): 6.14%

    3. Return (1 year): 9.50%

  19. WisdomTree AT1 CoCo Bond UCITS ETF EUR Hedged

    1. Dividend Yield: 6.10%

    2. Dividend Yield (1 year): 5.41%

    3. Return (1 year): -4.85%

  20. Xtrackers iBoxx EUR High Yield Bond 1-3 Swap UCITS ETF 1D

    1. Dividend Yield: 5.98%

    2. Dividend Yield (1 year): 5.90%

    3. Return (1 year): 3.87%

  21. Invesco USD High Yield Corporate Bond ESG UCITS ETF Dist

    1. Dividend Yield: 5.92%

    2. Dividend Yield (1 year): 5.28%

    3. Return (1 year): 2.00%

  22. WisdomTree AT1 CoCo Bond UCITS ETF GBP Hedged

    1. Dividend Yield: 5.91%

    2. Dividend Yield (1 year): 5.24%

    3. Return (1 year): -0.17%

  23. Xtrackers USD Emerging Markets Bond UCITS ETF 2D

    1. Dividend Yield: 5.76%

    2. Dividend Yield (1 year): 5.39%

    3. Return (1 year): 1.77%

  24. iShares J.P. Morgan USD Emerging Markets Bond UCITS ETF (Dist)

    1. Dividend Yield: 5.73%

    2. Dividend Yield (1 year): 5.34%

    3. Return (1 year): 1.86%

  25. Invesco USD High Yield Corporate Bond ESG UCITS ETF GBP Hedged Dist

    1. Dividend Yield: 5.59%

    2. Dividend Yield (1 year): 5.24%

    3. Return (1 year): 8.64%

  26. Vanguard USD Emerging Markets Government Bond UCITS ETF Distributing

    1. Dividend Yield: 5.51%

    2. Dividend Yield (1 year): 5.09%

    3. Return (1 year): 1.11%

  27. iShares J.P. Morgan USD EM Bond CHF Hedged UCITS ETF (Dist)

    1. Dividend Yield: 5.48%

    2. Dividend Yield (1 year): 5.38%

    3. Return (1 year): 4.73%

  28. iShares USD High Yield Corporate Bond UCITS ETF EUR Hedged (Dist)

    1. Dividend Yield: 5.18%

    2. Dividend Yield (1 year): 4.97%

    3. Return (1 year): 3.21%

  29. iShares USD Short Duration High Yield Corporate Bond UCITS ETF

    1. Dividend Yield: 5.16%

    2. Dividend Yield (1 year): 4.74%

    3. Return (1 year): 0.43%

  30. iShares J.P. Morgan EM Local Government Bond UCITS ETF

    1. Dividend Yield: 5.14%

    2. Dividend Yield (1 year): 5.16%

    3. Return (1 year): 5.97%

  31. JPMorgan USD Emerging Markets Sovereign Bond UCITS ETF - USD (Dist)

    1. Dividend Yield: 5.08%

    2. Dividend Yield (1 year): 4.76%

    3. Return (1 year): 0.68%

  32. PIMCO Emerging Markets Advantage Local Bond Index UCITS ETF Dist

    1. Dividend Yield: 4.81%

    2. Dividend Yield (1 year): 5.05%

    3. Return (1 year): 7.68%

  33. UBS ETF (LU) J.P. Morgan USD EM Diversified Bond 1-5 UCITS ETF (USD) A-dis

    1. Dividend Yield: 4.90%

    2. Dividend Yield (1 year): 4.55%

    3. Return (1 year): 0.40%

  34. iShares Fallen Angels High Yield Corp Bond UCITS ETF EUR Hedged (Dist)

    1. Dividend Yield: 4.83%

    2. Dividend Yield (1 year): 4.71%

    3. Return (1 year): 3.72%

  35. SPDR Bloomberg 10+ Year US Corporate Bond UCITS ETF

    1. Dividend Yield: 4.82%

    2. Dividend Yield (1 year): 4.12%

    3. Return (1 year): 1.41%

  36. PIMCO Emerging Markets Advantage Local Bond Index UCITS ETF EUR Hedged Dist

    1. Dividend Yield: 5.00%

    2. Dividend Yield (1 year): 4.93%

    3. Return (1 year): 3.66%

  37. iShares Global High Yield Corporate Bond UCITS ETF

    1. Dividend Yield: 4.44%

    2. Dividend Yield (1 year): 4.26%

    3. Return (1 year): 3.29%

  38. iShares USD Corporate Bond UCITS ETF (Dist)

    1. Dividend Yield: 4.43%

    2. Dividend Yield (1 year): 3.87%

    3. Return (1 year): 0.50%

  39. UBS ETF (LU) Bloomberg USD Emerging Markets Sovereign UCITS ETF (hedged to EUR) A-dis

    1. Dividend Yield: 4.76%

    2. Dividend Yield (1 year): 4.70%

    3. Return (1 year): 2.88%

  40. UBS ETF (LU) Bloomberg USD Emerging Markets Sovereign UCITS ETF (hedged to GBP) A-dis

    1. Dividend Yield: 4.71%

    2. Dividend Yield (1 year): 4.63%

    3. Return (1 year): 7.23%

  41. iShares J.P. Morgan USD EM Corporate Bond UCITS ETF (Dist)

    1. Dividend Yield: 4.68%

    2. Dividend Yield (1 year): 4.33%

    3. Return (1 year): 0.23%

  42. iShares EUR High Yield Corporate Bond UCITS ETF EUR (Dist)

    1. Dividend Yield: 4.53%

    2. Dividend Yield (1 year): 4.59%

    3. Return (1 year): 5.63%

  43. Xtrackers ESG USD Emerging Markets Bond Quality Weighted UCITS ETF 1D

    1. Dividend Yield: 4.52%

    2. Dividend Yield (1 year): 4.07%

    3. Return (1 year): 0.69%

  44. iShares Global High Yield Corporate Bond UCITS ETF EUR Hedged (Dist)

    1. Dividend Yield: 4.44%

    2. Dividend Yield (1 year): 4.71%

    3. Return (1 year): 3.72%

  45. SPDR Bloomberg 10+ Year US Corporate Bond UCITS ETF

    1. Dividend Yield: 4.82%

    2. Dividend Yield (1 year): 4.12%

    3. Return (1 year): 1.41%

  46. iShares Fallen Angels High Yield Corporate Bond UCITS ETF

    1. Dividend Yield: 4.91%

    2. Dividend Yield (1 year): 4.57%

    3. Return (1 year): 2.15%

  47. PIMCO US Short-Term High Yield Corporate Bond Index UCITS ETF Dist

    1. Dividend Yield: 5.37%

    2. Dividend Yield (1 year): 4.97%

    3. Return (1 year): 1.36%

  48. iShares USD Corporate Bond UCITS ETF (Dist)

    1. Dividend Yield: 4.43%

    2. Dividend Yield (1 year): 3.87%

    3. Return (1 year): 0.50%

  49. iShares USD Treasury Bond UCITS ETF

    1. Dividend Yield: 2.12%

    2. Dividend Yield (1 year): 1.90%

    3. Return (1 year): -5.39%

  50. iShares USD Government Bond 1-3yr UCITS ETF

    1. Dividend Yield: 0.46%

    2. Dividend Yield (1 year): 0.43%

    3. Return (1 year): -0.85%

Please note that dividend yield and returns can fluctuate over time, so it's essential to conduct thorough research and consider your investment goals and risk tolerance before investing in any ETFs. Additionally, always consult with a financial advisor for personalized investment advice.

Read More: What are UCITS ETFs?

Bottom Line:

European bond ETFs continue to attract investor interest, offering exposure to the debt securities of European countries with the potential for diversification and cost-effectiveness. While geopolitical risks, regulatory changes, and liquidity issues pose challenges, expert opinions suggest that European bond ETFs can still play a vital role in portfolios, especially as central banks navigate the post-pandemic economic landscape. Investors should remain informed and cautious, considering both the opportunities and challenges in the European bond market.

The Best European Bond ETFs to Add to Your Portfolio Today (2024)

FAQs

The Best European Bond ETFs to Add to Your Portfolio Today? ›

International treasury bonds, which have large allocations of European treasury bonds, have underperformed the broad U.S. equity market over the past year. The best European treasury bond exchange-traded funds (ETFs) are FLIA, ISHG, and BWZ.

What is the best bond ETF for European investors? ›

Highest Dividend Yielding Bond ETFs
Investment focus ETFDividend yield in EUR (current)Return in EUR (1 year)
Bonds World Corporate USD Amundi USD High Yield Corporate Bond ESG UCITS ETF Dist+ 5.81%+ 4.13%
Bonds Europe Corporate EUR SPDR Bloomberg Euro High Yield Bond UCITS ETF+ 5.78%+ 1.28%
48 more rows

What is the best bond ETF to buy now? ›

  • Vanguard Total World Bond ETF (BNDW)
  • Vanguard Core-Plus Bond ETF (VPLS)
  • DoubleLine Commercial Real Estate ETF (DCRE)
  • Global X 1-3 Month T-Bill ETF (CLIP)
  • SPDR Portfolio Corporate Bond ETF (SPBO)
  • JPMorgan Ultra-Short Income ETF (JPST)
  • iShares 7-10 Year Treasury Bond ETF (IEF)
  • iShares 10-20 Year Treasury Bond ETF (TLH)
Apr 8, 2024

What is the best bond ETF for 2024? ›

Best bond ETFs May 2024
  • The best bond ETFs.
  • Vanguard Total Bond Market ETF (BND)
  • Vanguard Total International Bond ETF (BNDX)
  • iShares Core U.S. Aggregate Bond ETF (AGG)
  • iShares Core Total USD Bond Market ETF (IUSB)
  • Schwab U.S. Aggregate Bond ETF (SCHZ)
  • SPDR Portfolio Aggregate Bond ETF (SPAB)

How to invest in European bonds? ›

To invest in bonds, you can not go directly to a bond issuer. Instead, you need to open a brokerage account to buy bonds by signing up with an online broker. A broker is a trading platform where you can buy and sell all types of investments to build your portfolio, from stocks to funds as well as bonds.

What is the best ETF for European bonds? ›

The best-performing European treasury bond ETF, based on performance over the past year, is the Franklin Liberty International Aggregate Bond ETF (FLIA).

What is the largest bond ETF in Europe? ›

iShares Core € Corp Bond UCITS ETF (IEBC)

The largest fixed income ETF in Europe is the iShares Core Euro Corporate Bond UCITS ETF (IEBC) with nearly €10bn assets under management (AUM). IEBC is comprised of investment grade corporate bonds based in euros and comes with a total expense ratio (TER) of 0.2%.

Why not to invest in bond ETFs? ›

Disadvantages of Investing in Bond ETFs

Credit risk: Bond ETFs hold a portfolio of bonds, and the credit quality of these bonds can vary. If the ETF holds bonds with lower credit ratings, it may be exposed to higher credit risk. Defaults or downgrades of the underlying bonds can have an impact on the ETF's performance.

Which bond gives the highest return? ›

Invest in safer portfolio without compromising returns.
Bond nameRating
9.50% DARBHANGA MOTIHARI TRANSMISSION COMPANY LIMITED INE732Q07BU9 SecuredINDIA AAA
9% ORIENTAL NAGPUR BETUL HIGHWAY LIMITED INE105N07720 SecuredCRISIL AAA
8.72% SHRIRAM TRANSPORT FINANCE COMPANY LIMITED INE721A07NL0 SecuredINDIA AA+
17 more rows

What ETF has the highest ROI? ›

100 Highest 5 Year ETF Returns
SymbolName5-Year Return
FNGOMicroSectors FANG+ Index 2X Leveraged ETNs43.42%
TECLDirexion Daily Technology Bull 3X Shares32.52%
SMHVanEck Semiconductor ETF30.90%
ROMProShares Ultra Technology28.22%
93 more rows

How to pick a bond ETF? ›

Here are four things to look for before buying a bond ETF.
  1. Credit risk. Buying a good bond ETF isn't just about picking the ETF with the highest yield. ...
  2. Interest rate risk. Bond prices have an inverse relationship with interest rates. ...
  3. The underlying index. Almost all exchange-traded funds are index funds. ...
  4. Fees.
Sep 29, 2016

What is the best international ETF? ›

Best Total International Funds
FundTickerReturn %
Fidelity Global ex US IndexFSGGX7.20
iShares Core MSCI Total International Stock ETFIXUS7.29
Vanguard FTSE All-World ex US ETFVEU7,45
Vanguard Total International Stock ETFVXUS7.39
1 more row
Mar 25, 2024

Which ETF has the best 10 year return? ›

Top 10 ETFs by 10-year Performance
TickerFund10-Yr Return
VGTVanguard Information Technology ETF19.60%
IYWiShares U.S. Technology ETF19.58%
IXNiShares Global Tech ETF18.20%
IGMiShares Expanded Tech Sector ETF17.95%
6 more rows

What is the best bond ETF to buy? ›

Some of the best bond ETFs to buy include SPDR Portfolio High Yield Bond ETF (NYSE:SPHY), iShares 0-5 Year TIPS Bond ETF (NYSE:STIP), and SPDR Portfolio Corporate Bond ETF (NYSE:SPBO). We curated our list of the best bond ETFs by choosing consensus picks from multiple credible websites.

What are European safe bonds? ›

The European safe assets base includes government bonds from the highest-rated euro area countries, as well as bonds issued by European supranational institutions that are backed by the European Union or euro area countries. German Bunds form naturally the first level of safe assets in the euro area.

How much is a $1000 savings bond worth after 30 years? ›

How to get the most value from your savings bonds
Face ValuePurchase Amount30-Year Value (Purchased May 1990)
$50 Bond$100$207.36
$100 Bond$200$414.72
$500 Bond$400$1,036.80
$1,000 Bond$800$2,073.60

What is the best ETF to buy in Europe? ›

  • SPDR® Portfolio Europe ETF. SPEU | ETF. ...
  • Xtrackers MSCI Europe Hedged Equity ETF. DBEU | ETF. ...
  • iShares MSCI Europe Small-Cap ETF. IEUS | ETF. ...
  • JPMorgan BetaBuilders Europe ETF. BBEU | ETF. ...
  • Vanguard FTSE Europe ETF. VGK | ETF. ...
  • iShares Core MSCI Europe ETF. IEUR | ETF. ...
  • WisdomTree Europe SmallCap Dividend ETF. ...
  • SPDR® EURO STOXX 50 ETF.

What is the high-yield bond index in Europe? ›

The FTSE Pan-European High-Yield Bond Index measures the performance of high-yield corporate debt denominated in Euro (EUR), Swiss Franc (CHF), and UK Sterling (GBP).

How to invest in American ETFs in Europe? ›

Five ways to purchase US-ETFs
  1. Open a brokerage account with a non-European address. ...
  2. Open a brokerage account with a non-European company. ...
  3. Get an exemption (treated as "elective professional client"). ...
  4. Buy US-ETFs indirectly through options. ...
  5. Hire a financial management firm.

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