Investors Embrace New ETFs Amid Record Bond Market Inflows

CHICAGO, IL — Investors are increasingly turning to exchange-traded funds (ETFs) as more than 1,000 new ETFs are set to launch in the United States this year. As the ETF market expands, finding quality, long-term-investment options can be tricky.

Among the standout new ETFs, the Vanguard Total Inflation-Protected Securities ETF (VTP) stands out with its low annual fee of just 5 basis points. This passive ETF targets the TIPS market, tracking bonds with at least one year to maturity and a minimum outstanding face value of $300 million. Its long-established investment strategy helps it deliver value to investors while remaining cost-effective, being 13 basis points cheaper than the competing iShares TIPS Bond ETF.

Next, the Capital Group High Yield Bond ETF (CGHY), which launched recently, charges 39 basis points and boasts a Silver Morningstar Medalist Rating. Though it is new to the market, it aligns closely with the American High-Income Trust mutual fund, which has a proven track record of success. This ETF leverages strategies that have shown excellent returns after a strategy shift in 2020.

Lastly, the RACWI US ETF (RAUS), which debuted in September, currently offers zero fees and will likely charge 15 basis points when its fee waiver concludes. This large-blend ETF applies a market capitalization weighting to its holdings, providing a slightly different investment approach compared to previous Research Affiliates offerings. Investors can expect returns that align closely with the market, accompanied by a quality tilt in the portfolio.

As bond ETFs attract hundreds of billions of dollars, it’s crucial for investors to understand the varying risk levels associated with different bond strategies. Dan Sotiroff, a senior manager research analyst at Morningstar Research Services, emphasizes that investors should carefully consider how these new ETFs fit into their overall portfolios.

In the first three quarters of 2025, about one trillion dollars have flowed into ETFs, with bond ETFs claiming a significant portion of inflows. Active and passive bond ETFs are competing for investors’ attention, but recent trends show a preference for the established, passively managed options from companies like Vanguard and iShares.

These new ETFs represent innovative ways to approach investment strategies in a crowded market. By standing out through competitive pricing, reputable management, and established processes, they present solid options for long-term investors.