I'm a big believer in Exchange Traded Funds, or ETFs. I like just about everything about them. They give me a way to invest in "the market" without buying a market's worth of different securities to achieve diversification. They're every bit as liquid as investing in stocks. They're efficient as long as you stay in the mainstream of ETF investments and don't get lured into any of the boutique, or sector, ETFs. And done right, they're inexpensive. Most ETFs have lower expense ratios than mutual funds.

Two of my favorite bond ETF investments are the iShares Lehman Aggregate Bond Fund and the iShares iBoxx $ Investment Grade Corporate Bond Fund. I like these funds for my own portfolio because they are both broad based, low expense and yield decent returns against the indexes they are set up to mimic.

Let's have a look at exactly what these two bond Exchange Traded Funds are set up to do for me. First, the iShares Lehman Aggregate Bond Fund:

The iShares Lehman Aggregate Bond Fund seeks investment results that correspond generally to the price and yield
performance, before fees and expenses, of the total United States investment-grade bond market as defined by the Lehman Brothers U.S.
Aggregate Index. The Fund invests in a representative sample of the securities in the Index, which has a similar investment profile
as the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index.

Now let's look at what the iShares iBoxx $ Investment Grade Corporate Bond Fund is set up to do:

The iShares iBoxx $ Investment Grade Corporate Bond Fund
seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of a segment of the U.S.
investment-grade corporate bond market, as defined by the iBoxx $ Liquid Investment Grade Index. The Fund invests in a representative sample of the securities in the Index, which has a similar investment profile as the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index.

The Aggregate ETF's goal is to track the bond market as a whole. Its scope is broader than the Corporate ETF. I would expect to find many of the bonds found in the Corporate Bond ETF in the Aggregate ETF. But in addition to those overlapping securities I'd expect to find a long list of non-corporate issues such as government and mortgage backed bonds in the Aggregate ETF.

Expenses comparison
Expenses-wise, these two ETFs stack up well against the best of the best. Few investment vehicles are less expensive to own than these Bond Exchange Traded Funds. The iShares Lehman Aggregate Bond Fund has an expense ratio of 0.20%. The iShares iBoxx $ Investment Grade Corporate Bond Fund has an even lower expense ratio. It's a very frugal 0.15%, which is as low as I've seen in a bond ETF.

Performance
In the performance category I find the Investment Grade Corporate ETF has outperformed the Aggregate Bond ETF by a fraction of a percentage point. The Investment Grade Corporate ETF's most recent 12 months' return has been 6.03%. The iShares Lehman Aggregate Bond ETF's most recent 12 months' performance has been 5.31%. Neither of these are bad at all. After all, I'm investing in bonds here. Their returns are going to track interest rates more closely than anything else.

On the surface it appears the Investment Grade Corporate ETF is the way to go. It features both lower expenses and a better most recent 12 month return. There is one other factor worth consideration here however.

Risk
Looking at the risk measurements, I see that the iShares iBoxx $ Investment Grade Corporate Bond ETF is a more volatile investment than the iShares Lehman Aggregate Bond ETF. In fact, over the past three years the Investment Grade Corporate Bond ETF, with a Standard Deviation of 4.33%, has been almost twice as risky as the Aggregate Bond ETF, with a Standard Deviation of 2.83%.

The slightly larger return is paired with an extra bit of risk I'd be taking on in investing in the Investment Grade Corporate Bond ETF.

Which one's "right" for me? In my case, both are. For me they are both good ways to invest in bonds. Both ETFs have low expense ratios and are sufficiently large and liquid to be efficient investments. I will certainly have one of the two in my portfolio. I may end up with both; but frankly I don't see much reason to double up on trading commissions.