BND is a broad U.S. bond market ETF offering a solid 4.04% yield. Its 1-year return is negative (-3.1%), however — a textbook example of bond prices falling during a period of rising rates.

Its low correlation with equities makes it a useful diversification tool for reducing overall portfolio volatility. Contrary to the common perception of bonds as "safe income," investors should clearly understand that principal value itself can fluctuate with rate movements.