When markets get shaky, I always look to bond mutual funds and ETFs as my safety net. They don’t offer big flashy returns, but they do one thing really well—preserve capital and generate steady income. Over the years, I’ve come to rely on certain types of bond funds to protect my portfolio from stock market swings, rising interest rates, inflation, and economic slowdowns.
So here’s a full breakdown of 12 bond mutual funds and ETFs I would consider buying today for protection. I’ve grouped them based on what kind of protection they offer—interest rate risk, credit risk, inflation, or recession—so you can mix and match depending on your goals.
Table of Contents
1. For General Stability: Vanguard Total Bond Market Index Fund (VBTLX / BND)
- Type: Broad U.S. bond market exposure
- Yield: ~4.3%
- Duration: ~6.5 years
- Why I like it: It’s my go-to for a core bond position. It holds U.S. Treasuries, corporate bonds, and mortgage-backed securities. If I want simplicity, low cost, and diversification, I start here.
| Metric | VBTLX | BND (ETF version) |
|---|---|---|
| Expense Ratio | 0.05% | 0.03% |
| Holdings | ~10,000 | ~10,000 |
| SEC Yield | ~4.3% | ~4.3% |
2. For Rising Rates: iShares Floating Rate Bond ETF (FLOT)
- Type: Floating-rate corporate bonds
- Yield: ~5.3%
- Duration: ~0.15 years
- Why I like it: Since these bonds adjust with interest rates, they don’t get crushed when rates go up. It’s one of my favorite hedges against the Fed.
3. For Recession Defense: Vanguard Short-Term Treasury ETF (VGSH)
- Type: Short-term U.S. Treasuries
- Yield: ~4.7%
- Duration: ~1.9 years
- Why I like it: When a recession hits, people flee to Treasuries. Short-term ones like this hold up better and give decent yield with very little risk.
4. For Inflation Hedge: Schwab U.S. TIPS ETF (SCHP)
- Type: Treasury Inflation-Protected Securities (TIPS)
- Yield: ~2.3% real yield
- Duration: ~6.7 years
- Why I like it: TIPS are indexed to inflation. If CPI rises, the bond’s value rises too. I hold this when I’m worried about purchasing power erosion.
5. For Tax-Exempt Income: Vanguard Tax-Exempt Bond ETF (VTEB)
- Type: Investment-grade municipal bonds
- Yield: ~3.1% (tax-free)
- Duration: ~5.2 years
- Why I like it: Great for taxable accounts. The yield is federally tax-free and may also be state-tax-free depending on where you live.
6. For Defensive Yield: Fidelity Strategic Income Fund (FSICX)
- Type: Multi-sector bond fund (high-yield, foreign, government)
- Yield: ~6.1%
- Duration: ~4.7 years
- Why I like it: This one is actively managed. The managers shift exposure across different types of bonds depending on market conditions. It offers high income and decent defense.
7. For Super Low Risk: iShares Short Treasury Bond ETF (SHV)
- Type: Treasury bills (1-year and under)
- Yield: ~5.2%
- Duration: ~0.35 years
- Why I like it: Basically a cash substitute. I use it to park money when I want zero default risk and quick access.
8. For Corporate Stability: iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD)
- Type: Investment-grade corporate bonds
- Yield: ~5.3%
- Duration: ~8.5 years
- Why I like it: If I want income and I’m okay with a bit more duration risk, this gives me exposure to companies with strong balance sheets.
9. For Risk-Off Yield: DoubleLine Total Return Bond Fund (DBLTX)
- Type: Actively managed mortgage-backed and U.S. debt
- Yield: ~5.5%
- Duration: ~5.6 years
- Why I like it: Run by Jeffrey Gundlach’s team. When markets wobble, this fund tends to hold up well. It’s more defensive than most income-focused funds.
10. For Municipal Safety: Nuveen AMT-Free Municipal Credit Income Fund (NVG)
- Type: Closed-end muni bond fund
- Yield: ~5.0% tax-free
- Leverage: Yes (~35%)
- Why I like it: Good for income in high tax brackets. It’s AMT-free, which matters if you’re subject to alternative minimum tax. I use it in taxable accounts only.
11. For International Diversification: Vanguard Total International Bond ETF (BNDX)
- Type: Global investment-grade bonds
- Yield: ~3.5%
- Duration: ~7.4 years
- Why I like it: I don’t want all my fixed income tied to the U.S. BNDX gives me hedged exposure to developed international bond markets. It’s low risk, low yield, but adds protection from U.S.-specific shocks.
12. For Aggressive Income With Some Risk: PIMCO Income Fund (PONAX / PIMIX)
- Type: Actively managed global bond fund
- Yield: ~6.5%
- Duration: ~2.9 years
- Why I like it: If I want more income but still want some protection, this is a strong choice. PIMCO managers have a long track record of navigating downturns without blowing up.
Quick Comparison Table
| Fund/ETF | Strategy | Yield | Duration | Risk Level |
|---|---|---|---|---|
| VBTLX/BND | Total US Bonds | ~4.3% | 6.5 yrs | Low |
| FLOT | Floating-rate | ~5.3% | 0.15 yrs | Low-Med |
| VGSH | Short Treasuries | ~4.7% | 1.9 yrs | Very Low |
| SCHP | TIPS | ~2.3% real | 6.7 yrs | Low |
| VTEB | Tax-Exempt | ~3.1% tax-free | 5.2 yrs | Low |
| FSICX | Multi-sector | ~6.1% | 4.7 yrs | Medium |
| SHV | Ultra-short Treasuries | ~5.2% | 0.35 yrs | Very Low |
| LQD | Corporate Bonds | ~5.3% | 8.5 yrs | Med-High |
| DBLTX | MBS & Gov’t | ~5.5% | 5.6 yrs | Medium |
| NVG | Muni Closed-End | ~5.0% tax-free | 7.1 yrs | Med-High |
| BNDX | Intl Bonds (Hedged) | ~3.5% | 7.4 yrs | Low |
| PONAX/PIMIX | Global Income | ~6.5% | 2.9 yrs | Medium |
Final Thoughts
When I want protection, I don’t just buy any bond fund. I match the fund to what I’m protecting against. If I’m worried about inflation, I lean toward TIPS. If I want short-term safety, I use SHV or VGSH. If I want income with some risk cushion, I mix in active funds like PONAX or DBLTX.
Every fund on this list plays a role in managing risk while still generating steady returns. I always check yield, duration, and credit quality before I buy—because that’s what determines how the fund will behave when things get rough.
