Bond ETFs Like AGG Grow Popular

Bond-based exchange-traded funds are increasing in popularity, researcher Morningstar reported on Wednesday.

ETFs based on taxable bonds saw net inflows of more than $32 billion, the most among the major asset classes, according to Morningstar. Vanguard's Total Bond Market fund(BND)and iShares Barclays Aggregate Bond Fund (AGG) saw some of the largest inflows.

Gold- and fixed-income-based ETFs are increasingly seen as powerful ways to combat inflation, which is expected to become a powerful force in the wake of the Federal Reserve's policies for quantitative easing -- and even though the Fed announced on Wednesday that it planned to drop those policies in February 2010.