Recession jitters don’t scare smart investors who hedge with the right bonds.
When the economy starts looking shaky, you don’t want all your money riding the stock market rollercoaster. That’s where bond ETFs come in—they’re like the financial equivalent of grabbing an umbrella before a storm. You won’t stop the rain, but you won’t get soaked either. The best part? You don’t have to be a bond market genius to protect yourself. These funds are built for regular people who want stability without getting fancy.
Whether you’re looking for a cash-like parking spot, a hedge against inflation, or a longer-term play for falling interest rates, there’s a bond ETF that fits. Some are ultra-safe and steady, while others swing a little more but reward you when rates drop. If recession talk is stressing you out, these 10 bond ETFs are your best bet for keeping calm, collecting yield, and riding out the storm with your financial sanity intact.
1. Ultra-short bonds like SGOV give you safety and instant access.
The iShares 0-3 Month Treasury Bond ETF (SGOV) is basically a cash alternative on steroids. It holds U.S. Treasury bills with maturities of three months or less, which, as stated by Nathan Reiff at Investopedia, means extremely low interest rate risk.
You’re not going to get rich on SGOV’s yield, but it’s one of the safest places to park your money when everything else feels unstable. The big perk here is liquidity—you can get your cash out quickly without worrying about big price drops. It’s a great ETF for building a recession-resistant foundation, especially if you want to wait out market volatility without moving to a traditional savings account.
2. BND gives you exposure to the entire U.S. bond market in one shot.
Vanguard’s Total Bond Market ETF (BND) is like the bond world’s greatest hits album. As reported by the authors at Vanguard, it includes everything from Treasuries and corporate bonds to mortgage-backed securities, all investment-grade and all spread across different durations. It’s not flashy, but it’s rock-solid when the economy slows.
BND’s strength is its broad diversification. If you’re not sure which way rates are headed, this ETF keeps you balanced and less exposed to big swings. It’s also one of the cheapest bond ETFs out there, which means more of your returns actually go in your pocket.
3. SPTS keeps things short and sweet with 1-3 year Treasuries.
The SPDR Portfolio Short Term Treasury ETF (SPTS) holds U.S. government bonds with maturities between one and three years. According to the authors at Morningstar, that makes it a solid middle ground between ultra-short-term safety and a little bit of extra yield. It doesn’t get rocked when interest rates move, which is perfect when markets are shaky.
It’s especially helpful if you want low-risk income without going too far out on the duration curve. In a recession, short-term Treasuries often become a safe haven, and SPTS puts you right in the center of that action without taking on much risk.
4. AGG offers a little of everything for recession-proof balance.
The iShares Core U.S. Aggregate Bond ETF (AGG) tracks the Bloomberg U.S. Aggregate Bond Index and includes Treasuries, mortgage-backed securities, and high-grade corporate debt. Basically, it’s a one-stop shop for a well-diversified bond portfolio.
AGG is a good pick if you want something sturdy and balanced to anchor your portfolio. It’s not going to shoot the lights out, but in a downturn, it holds up better than stocks and gives your portfolio a smoother ride. It’s the go-to option for a recession hedge with just enough yield to feel worthwhile.
5. MINT gives you higher yield with short-term safety.
PIMCO’s Enhanced Short Maturity Active ETF (MINT) is a step up from a basic Treasury fund. It’s actively managed and targets short-duration, high-quality bonds—think government, agency, and top-tier corporate debt. You get a bit more yield than SGOV or BSV without taking on too much risk.
Because it’s actively managed, MINT can adapt to market conditions faster than passive ETFs. That’s a major perk during a recession when interest rates, inflation, and credit risk can all swing fast. If you want a smart place to park your cash with a little more reward, MINT is a top pick.
6. TLT goes long on Treasuries—and wins big when rates fall.
The iShares 20+ Year Treasury Bond ETF (TLT) is all about long-duration U.S. government bonds. This one moves more dramatically than short-term funds, especially when interest rates start to drop—something the Fed tends to do during a recession.
That volatility means TLT isn’t for the faint of heart, but it’s powerful when the economy tanks. Long-term Treasuries often surge as investors flee to safety. If you want a bond ETF that can actually grow during a downturn, not just protect, TLT deserves a spot in your toolkit.
7. EDV magnifies your gains when interest rates nosedive.
The Vanguard Extended Duration Treasury ETF (EDV) is for those who want to bet big on falling rates. It holds long-term zero-coupon Treasuries, which means massive price sensitivity to rate changes—good news when the Fed starts cutting.
EDV can be volatile, but during a deep recession, it’s one of the few bond ETFs that can post equity-like gains. If you’re confident rate cuts are coming and want to hedge aggressively, this fund gives you maximum exposure to that move.
8. IEF finds a middle ground with 7-10 year Treasuries.
The iShares 7-10 Year Treasury Bond ETF (IEF) strikes a sweet spot. It offers more yield than short-term bonds but isn’t as dramatic as something like TLT. That makes it a great core holding for recession-proofing your portfolio without committing to extremes.
It’s stable enough to help preserve capital but long enough to benefit if rates come down. For investors who want to hedge gently while keeping some upside potential, IEF walks that line better than most.
9. BSV is simple, short, and reliable in shaky times.
Vanguard’s Short-Term Treasury ETF (BSV) sticks with short-maturity U.S. government bonds. It’s extremely low risk and highly liquid, making it ideal for conservative investors who want peace of mind above all else.
In a recession, BSV does what it’s designed to do—hold its value and provide consistent, albeit modest, income. If you’re tired of volatility and just want a place to wait things out, BSV is the ETF equivalent of calm in the storm.
10. TIP helps you stay ahead when inflation and recession hit together.
The SPDR Bloomberg Barclays TIPS ETF (TIP) holds Treasury Inflation-Protected Securities. These bonds adjust with inflation, making them an ideal hedge when rising prices and slowing growth start tagging in and out like pro wrestlers.
TIPS often don’t get enough credit during recessions, but they shine when traditional bonds lose ground to inflation. If you’re worried about stagflation or unexpected price spikes, TIP helps you stay grounded while still protecting your portfolio.