The Best EUR Government Bond ETFs to Buy

Despite recent volatility, eurozone government bonds remain a popular lower-risk building block in well-diversified portfolios.

“We expect them to deliver higher returns than cash over the long term while providing more stability to portfolios than equities,” says Shannon Kirwin, principal for fixed income at Morningstar.

The asset class has seen positive net inflows for five consecutive months, according to Morningstar data.

What Are EUR Government Bond ETFs?

EUR government bond portfolios mainly hold sovereign bonds and securities issued by government-backed agencies. These investments are typically euro-denominated or hedged against currency swings and are widely used as a low-risk anchor in portfolios.

The 5 Best EUR Government Bond ETFs to Buy in 2026

To find the best EUR government bond ETFs to buy, we screened for those earning a

of Bronze, Silver, or Gold with 100% analyst coverage. All the ETFs on the list fall into the EUR government bond and have at least EUR 100 million in assets. All data is as of March 16.

1. iShares Core € Govt Bond UCITS ETF EUNH
2. State Street SPDR Bloomberg Euro Government Bond UCITS ETF Acc SYBB
3. Xtrackers II Eurozone Government Bond UCITS ETF XGLE
4. Amundi Index Solutions - Amundi Prime Euro Government Bond UCITS ETF PR1R
5. Vanguard EUR Eurozone Government Bond UCITS ETF VETY

Morningstar expects the highly rated EUR government bond funds on this list to outperform their peers over a full market cycle. But even though all the funds on our list fall into the same category, they may practice different strategies, and therefore behave differently from each other. Investors need to do some homework to understand exactly what a particular fund invests in before buying.

Here’s a quick look at each of the best EUR government bond ETFs. Be sure to review a fund’s complete report for more details.

iShares Core € Govt Bond UCITS ETF

• Morningstar Medalist Rating
  : Gold
• Morningstar Rating
  : ★★★
• Ongoing Charge: 0.07
• 12 Month Yield: 2.44%

The EUR 5.5 billion fund has gained 2.79% over the past 12 months, while the average fund in its category is up 2.44%. The iShares fund, which launched in April 2009, has climbed 2.14% over the past three years and lost 2.56% over the past five years.

The eurozone government bond market is highly liquid, and opportunities to add value over a standard benchmark are limited over the long term. This makes an all-issuer, all-maturity, and low-cost index-tracking approach like this one akin to a default option for investors seeking a core holding for this market exposure. The low ongoing charge levied by this strategy provides a solid tailwind to returns.

Passive funds providing exposure to the eurozone sovereign bond market track indexes from different providers, and so there may be slight differences in bond selection. However, this has not translated into discernible variations in performance between passive peers over recent years. This strategy tracks an all-maturity index covering both core and peripheral issuers with an investment-grade rating.

The two main sources of risk for this market exposure are interest rates and perceptions about the creditworthiness of the various issuers, particularly those classed as peripheral like Italy and Spain. Over the long term, these risks have tended to balance themselves out, and the core-peripheral risk has been largely tamed by the protective role that the ECB continues to display. Still, in the short term, these passive strategies can experience periods of underperformance, mainly at times of change in monetary policy settings.

Aside from country relative value and duration calls, active managers could prop up yield by adding agency and quasi-sovereign debt while not adding meaningful credit risk to the strategy. However, active managers in this category don’t tend to deviate much from the benchmark.

Allocation to euro government bonds is typically buy-and-hold in nature; something for the long term. In that sense and for this bond market, the costs of regular rebalancing can easily offset the potential benefits of alpha-generating calls. This places low-cost passive funds in a strong position to deliver returns above the average category peer—inclusive of actively managed funds—over extended periods.

Overall, a low-cost passive approach to investing in the eurozone government bond market can be considered as the default option for investors with a long-term horizon.

Read Morningstar’s full report on the iShares Core € Govt Bond UCITS ETF.

State Street SPDR Bloomberg Euro Government Bond UCITS ETF Acc

• Morningstar Medalist Rating
  : Gold
• Morningstar Rating
  : ★★★
• Ongoing Charge: 0.07
• 12 Month Yield: 2.30%

The EUR 1.2 billion fund has gained 2.87% over the past 12 months, while the average fund in its category is up 2.44%. The State Street fund, which launched in May 2011, has climbed 2.14% over the past three years and lost 2.59% over the past five years.

The fund mirrors the maturity, country, and credit quality distribution of the index. The Bloomberg Euro Treasury Bond Index measures the performance of the investment-grade-rated eurozone government bond market. The index covers all maturity buckets above one year. Bonds must have a minimum outstanding of EUR 300 million and are weighted according to their outstanding amount.

Issuing countries are required to have an investment-grade rating, calculated as the middle rating assigned by the three main rating agencies. Index values are calculated using midmarket prices provided by market makers toward the close of London trading. The index rebalances monthly. Intramonth bond coupon income is reinvested into the index at rebalancing.

The fund mirrors the maturity, country, and credit quality distribution split of the index. The four largest eurozone issuers (Italy, France, Germany, and Spain) typically account for 80% of the fund’s value. The breakdown by maturities is reflective of government bond issuance patterns across the eurozone.

Note: The Process Pillar rating and analysis are indirectly assigned by an analyst. When an analyst covers a passively managed vehicle that tracks a particular index, Morningstar associates the Process Pillar rating assigned to that vehicle with the index concerned. Morningstar then maps the Process Pillar associated with a given index to any other uncovered passive strategies that track the same index. This ensures that the analyst’s view is leveraged whenever available and promotes consistency when analyzing passive vehicles associated with a given index.

Read Morningstar’s full report on the State Street SPDR Bloomberg Euro Government Bond UCITS ETF Acc.

Xtrackers II Eurozone Government Bond UCITS ETF

• Morningstar Medalist Rating
  : Gold
• Morningstar Rating
  : ★★★
• Ongoing Charge: 0.07
• 12 Month Yield: 0.00%

The EUR 2.9 billion fund has climbed 2.41% over the past 12 months, performing roughly in line with the average fund in its category, which rose 2.44%. The Xtrackers fund, which launched in May 2007, has climbed 2.16% over the past three years and lost 2.60% over the past five years.

Read Morningstar’s full report on the Xtrackers II Eurozone Government Bond UCITS ETF.

Amundi Index Solutions - Amundi Prime Euro Government Bond UCITS ETF

• Morningstar Medalist Rating
  : Gold
• Morningstar Rating
  : ★★★
• Ongoing Charge: 0.05
• 12 Month Yield: 2.66%

The Amundi Index Solutions - Amundi Prime Euro Government Bond UCITS ETF is run by a management team that earns an Above Average people rating from Morningstar. The team averages more than six years with the fund. Amundi earns a parent rating of Average.

Over the past 12 months, the Amundi fund rose 2.77%, while the average fund in its category rose 2.44%. The fund, which launched in February 2019, has climbed 2.17% over the past three years and lost 2.53% over the past five years.

Read Morningstar’s full report on the Amundi Index Solutions - Amundi Prime Euro Government Bond UCITS ETF.

Vanguard EUR Eurozone Government Bond UCITS ETF

• Morningstar Medalist Rating
  : Gold
• Morningstar Rating
  : ★★★
• Ongoing Charge: 0.07
• 12 Month Yield: 2.85%

Over the past 12 months, the Vanguard fund rose 2.76%, while the average fund in its category rose 2.44%. The fund, which launched in February 2016, has climbed 2.15% over the past three years and lost 2.53% over the past five years.

Read Morningstar’s full report on the Vanguard EUR Eurozone Government Bond UCITS ETF.