A pair of exchange-traded bond funds popped up on Wednesday as investors fled stocks in search of safety. The Vanguard Total Bond ETF (BND) and the iShares Core US Aggregate Bond ETF (AGG) both gained 1.4 percent on Wednesday morning. The fund is having its best day since November 10. Both are up about 2.5% this year. Gains in these funds triggered a sharp sell-off in equities as well as Credit Suisse shares amid global fears around the banking sector. Investors sought the safety of Treasuries, as traders bought the issues as yields were falling. BND AGG YTD Line Year-to-Date Performance for BND and AGG At a time when credit quality is at the fore for investors, both BND and AGG provide broad exposure to US investment grade bonds, but US Treasuries and other government Bonds account for the largest portion of holdings in both ETFs. Just over 67% of assets in the BND portfolio have credit ratings that are considered “US Government”, meaning they include Treasuries, US agency issues and US agency mortgage-backed securities. Meanwhile, the Treasury’s share of AGG accounts for 41%, followed by issues from the Federal National Mortgage Association and the Government National Mortgage Association — better known as Fannie Mae and Ginnie Mae. Corporate issues in BND include Amazon, AbbVie and Alphabet, while AGG holds bonds from Morgan Stanley, Bank of America and JPMorgan Chase. — CNBC’s Gina Francola contributed to this report.
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