The Conservative ETF That Beats Bonds but Costs You Almost Nothing to Own

"AOK targets capital preservation with modest income generation. The fund is designed with retirees, near-retirees, and capital-preservation-focused investors in mind, according to its stated investment objective. Its return engine is primarily bond income and price appreciation, supplemented by modest equity participation. The 30% equity sleeve provides just enough growth exposure to prevent the portfolio from being purely rate-dependent, while the 70% bond core anchors volatility."

"Over the past year, AOK has returned 11.86%, outpacing the pure bond benchmark iShares Core U.S. Aggregate Bond ETF (NYSEARCA:AGG)'s 7.5% one-year return, which validates the equity sleeve's contribution. But the five-year picture tells a harder story: AOK gained just 20.82% over five years, compared to 76.76% for SPDR S&P 500 ETF Trust (NYSEARCA:SPY) over the same period."

"The current rate environment gives that bond core something to work with. The 10-year Treasury yield sits at 4.08%, well below its 12-month peak of 4.58% hit in May 2025, meaning bond prices have recovered meaningfully from that stress period. Meanwhile, AOK's 3.27% dividend yield clears the current 2.2% inflation rate by roughly 107 basis points, so income holders are at least keeping pace with purchasing power erosion in real terms."

AOK is a conservative allocation ETF designed for retirees and capital-preservation-focused investors, combining 70% fixed income with 30% equities through a low-cost fund-of-funds structure at 0.15% net expenses. The fund targets modest income generation and capital preservation, with its bond core anchoring volatility while the equity sleeve provides growth exposure. AOK's 3.27% dividend yield exceeds inflation by approximately 107 basis points, supporting real purchasing power. Over one year, AOK returned 11.86%, outperforming pure bond benchmarks, but five-year returns of 20.82% significantly lag equity-focused portfolios like SPY at 76.76%, reflecting the deliberate tradeoff between stability and growth participation.

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