Exchange-traded funds have grown explosively but most ETFs have held stocks. Recently, ETFs that hold bonds have become available. They offer investors a simple, inexpensive way to get broad exposure to the bond market.
State Street Global Advisors, for example, just introduced five fixed-income ETFs:
* SPDR Lehman Aggregate Bond (Ticker: LAG). This covers the overall bond market.
* SPDR Lehman 1-3 Month T-Bill (BIL), SPDR Lehman Intermediate Term Treasury (ITE), and SPDR Lehman Long Term Treasury (TLO)can be used if you want exposure to government bonds with short, intermediate or long-term maturities.
* SPDR Barclays Capital TIPS (IPE) provides exposure to inflation-protected bonds.
For all of these ETFs, prices are extremely low. The TIPS ETF charges 0.18 percent a year and the others all charge 0.13 percent.
