Core Insights - The article discusses the evolving landscape of bond ETFs, highlighting three unique options that diverge from traditional index bond funds [1] Group 1: Janice Henderson CLA AA ETF (J AAA) - This ETF focuses on collateralized loan obligations (CLOs), which are actively managed diversified pools of non-investment grade bank loans [2] - The ETF invests at least 90% of its assets in AAA rated CLO trenches, ensuring a strong risk management approach [3] - It has achieved a trailing 12-month yield of 5.8%, outperforming the category average of 4.7% [4] Group 2: Vanguard Total International Bond ETF (BNDX) - This ETF is a passive international bond fund that limits exposure to Chinese bonds to avoid transaction costs and operational challenges [6][7] - Despite the cap on Chinese bonds, it has outperformed its category average by 24 basis points annualized since its inception in 2013 [8] - The ETF's strategy has provided superior protection during periods of credit market stress [8] Group 3: PGM Short Duration Multi-Sector Bond ETF (PSDM) - This ETF spans multiple sectors and aims to outperform its benchmark, taking on more credit risk than most peers [9][10] - It has demonstrated strong performance through its mutual fund sibling, which ranked in the top quartile of its category over the trailing 10 years ending July 2025 [11] - The ETF's higher volatility is justified by superior risk-adjusted returns, as measured by the Sharpe ratio [12]