Add the names of Vanguard Group and Barclays Global Investors to the list of companies offering bond exchange-traded funds.

Mutual-fund giant Vanguard Group filed its first set of bond ETF products on Jan. 17, and Barclays Global Investors began trading eight new bond ETFs the previous week.

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The filings, says one source, "pits Vanguard squarely against Barclays Global Investors."

BGI now has 14 bond ETFs in its iShares ETF menu. It's also filed for another bond ETF, the iShares iBoxx $ High Yield Corporate Bond Fund.

An executive with BGI said bond ETFs could be a real boon to investors who are looking for fixed-income investments but can struggle with buying individual bonds across a range of styles and maturities.

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Another analyst pointed out that bond ETFs "are generally a cheaper alternative to bond mutual funds which have an average annual expense ratio of 1.09 percent, including for taxable and municipal-bond funds."

However, bond products still account for a small part of the overall ETF industry. In fact, they only made up five percent of overall ETF assets under management through November 2006.

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