From Morningstar:

José Garcia-Zarate, Associate Director of Passive Strategies Research at Morningstar, explains the pros and cons of investing in government bonds with ETFs. ETFs are an ideal vehicle for long-term investors due to their low management costs. While they lack flexibility in the short term, they offer a cost-effective option over extended periods.

The selection of the best government bond ETFs should always start with the index, which represents the investment proposition. Long-term investors should look for indexes covering the full maturity spectrum and all issuing countries of a certain area, such as the Eurozone, for diversification. It is crucial to consider the costs and replication methods of the ETFs.

Morningstar highly favors Euro government bond ETFs, particularly those covering the entire maturity spectrum of all issuing countries of the Eurozone. The iShares Core € Govt Bond ETF, Xtrackers Euro Government bond ETF, Vanguard, and Amundi are recommended choices for investors. These ETFs come with a Morningstar medalist rating of Gold and offer low basis points for charges.

For those who are interested in government bonds returning to investors’ portfolios, there is a favorable view of Euro government bond ETFs that offer core building blocks for long-term investments with low management costs. Morningstar highly recommends ETFs that cover the entire maturity spectrum of all issuing countries of the Eurozone, making them a suitable choice for investors.



Read more: How to Choose a Government Bond ETF