Is IUSB the best bond “insurance” for your portfolio?
Posted on February 6, 2026

This post compares the performance of IUSB (iShares Core Universal USD Bond ETF) to similar Intermediate Core Plus bond funds. In general, nine funds displayed have outperformed IUSB.

 

Everything we own in our portfolio other than stocks is to protect us when stocks decline. We ideally sell something that grows over time and goes in the opposite direction of stocks when they crater. We sell this “insurance” to give stocks time to recover. With one major exception in 2022, bonds have gone in the opposite direction or declined MUCH LESS than stocks when they’ve cratered in the last 100 years.

 

I bought IUSB in 2014 as our “insurance” when Patti and I started our Spend and Invest phase of life. It was the only Intermediate Core-Plus Bond index fund at the time. I thought this was more representative of the total US bond market.

 

== Core Plus Bond Fund ==

 

A Core Plus bond fund holds bonds other than investment-grade. IUSB holds about 7% of its portfolio in bonds below investment grade. This sheet shows the performance of IUSB compared to the Bloomberg index it tries to match.

 

IUSB returns about 0.3 to 0.5 percentage points more per year than an index fund of only investment-grade bonds.

 

== Other Core Plus Funds ==

 

This recent Morningstar article lists seven top-performing actively managed “Intermediate Core-Plus Bond” funds. I show the performance of these seven and two more: one from Fidelity and one from Vanguard. (PDF here) All have outperformed IUSB.

 

 

I highlight DODIX, which looks most attractive to me: high return and lowest decline in 2022; it has less below-investment grade bonds (Grade BB and lower = 4.4%) than the index (7%) or all others on this list; CINCX holds 23% bonds below investment-grade, for example. (Our money is at Fidelity and DODIX is not one of their No Transaction Fee mutual funds; I will not pay a commission to buy DODIX.)

 

 

Conclusion: We retirees need to hold bonds. We want to solely or disproportionately sell bonds when stocks crater. With one major exception in 2022, bonds have gone in the opposite direction or declined MUCH LESS than stocks when they’ve cratered.

 

Patti and I have held IUSB since we started our retirement plan in 2014. It’s categorized as a Core Plus bond fund; 7% is higher risk, not investment-grade, bonds. It’s more representative of the total bond market. IUSB has returned more than the index for investment-grade bond funds. This post shows nine actively managed Core Plus bond funds that have higher expense ratio but have returned more than IUSB.