Best Euro Bond ETFs (High yield) - 2025 guide

For those who want consistent cash flow while staying within the Eurozone currency, high-yield Euro-denominated bond ETFs are a compelling choice.

In this article, we present a selection of the best Euro Bond ETFs ranked by dividend yield. The selection follows the following criteria:

• Assets under management (AUM > €100m): Large funds are more liquid, stable, and less likely to be shut down by the provider;
• Physical replication: By holding the actual bonds in the portfolio, these ETFs reduce counterparty risk, unlike synthetic products that rely on swaps;
• Ordered by dividend yield: Investors looking for income naturally focus on the highest-yielding options first. This list is structured accordingly.

This guide is designed for both European and US investors interested in gaining exposure to Euro-denominated bond markets.

The Best Euro Bond ETFs (High yield) - European investors

The following EU bond ETFs are only for European investors. These are all UCITS-domiciled (explained below) and listed on European exchanges such as Euronext.

^{*As of August 31st, 2025; In some ETFs, the % value refers to the Yield to Maturity (YTM), not the dividend yield. The YTM is a forward-looking estimate of total bond return until maturity.}

As mentioned above, all the ETFs presented are UCITS ETFs (Undertakings for Collective Investment in Transferable Securities). UCITS is the European regulatory framework for investment funds, ensuring investor protection and high transparency standards.

Important note for US investors: These UCITS ETFs are not directly available to US residents due to SEC and IRS restrictions (mainly PFIC rules and lack of US tax reporting). We’ll expand on this in the dedicated section “Can US Investors Buy UCITS ETFs?” below.

Euro Bond ETF highlights 

• WisdomTree AT1 CoCo Bond UCITS ETF: The standout performer in terms of yield, investing in subordinated bank debt (AT1/CoCos). Higher risk, but significantly higher payout potential.
• Government-focused ETFs (iShares, SPDR): Safer choices backed by Eurozone governments. The long duration makes them sensitive to interest rate changes, but yields remain solid at 3.5-3.9%.
• Sustainable & ESG options (UBS & Deka): For investors prioritizing sustainability, these ETFs offer exposure to corporate and green bonds with respectable yields above 3%.
• Short-duration ETF (UBS Euro Area Liquid Corp 1-5yr): Lower yield, but reduced interest rate risk makes it appealing for cautious investors.

Risks to consider

While Euro Bond ETFs are often perceived as safe, investors should understand the risks:

• Interest rate risk: Longer-maturity ETFs (10 to 30 years) can decline in value if interest rates rise.
• Credit risk: Particularly relevant for AT1/CoCo and corporate bond ETFs, where defaults are possible.
• Liquidity in stressed markets: While ETFs are liquid, underlying bonds may not be during extreme events.
• Yield vs. risk trade-off: The higher the yield, the higher the risk. This is especially true for subordinated bank bonds.

Where to buy Euro Bond ETFs? European investors

You can purchase these ETFs through most online brokers. Here are the most popular platforms available for European investors:

Can US investors buy UCITS ETFs?

UCITS ETFs are the European standard for regulated funds, widely used across the EU. However, the situation for US investors is a bit nuanced:

• Direct access restrictions: US residents cannot buy UCITS ETFs directly on European exchanges due to SEC and IRS regulations. The main issue is that UCITS funds do not provide the required US tax reporting (PFIC rules and Form 1099).
• Workarounds: US investors can look for US-domiciled equivalents (with the ISIN code starting as “US (...)”; often with similar benchmarks) traded on US exchanges.
  
  • Instead of UCITS, US investors typically use US-listed bond ETFs (e.g., iShares or Vanguard products) that track Euro bond indices or offer EUR-hedged share classes.
• For non-resident Americans: If a US citizen resides in Europe and opens an account with a European broker, they may gain access, but this can create complex tax implications.

Bottom line: UCITS ETFs are primarily designed for European investors, but US investors can often find very similar ETFs on US exchanges that avoid the regulatory hurdles.

The Best Euro Bond ETFs (High yield) - US investors

We searched for US-listed bond ETFs using several sources, including Etfdb.com, which provides exposure to European (or international non-US) high-yield bond ETF markets. 

However, we didn’t find many that are purely “Euro bond ETFs” in the sense of Eurozone government or corporate bonds, but here are some relevant ones and observations:

US-listed Bond ETFs with “International / Europe / ex-US” Exposure

Why “Euro Bond ETF (US-domiciled)” is hard to find

The term “Euro bond ETF” often refers to sovereign or corporate bonds denominated in EUR / issued in the Eurozone. Many US-listed “international bond” ETFs are broader: they include non-US bonds from many regions, not just Europe.

Also, due to regulatory, tax, and demand factors, US ETFs tend to bundle many-country exposures instead of creating ETFs just for Euro sovereign or Euro corporate bonds.

Where to buy International Bond ETFs?

Here’s a suggested table aimed at US investors showing brokers through which one could attempt to buy Euro Bond ETFs (if available), along with their fees, minimum deposits, and regulation: only Interactive Brokers is carried over from our original list. 

For the others, the data reflects their US-brokerage operations (or lack thereof).

Bottom line

Euro bond ETFs continue to be a valuable tool for income-focused investors. For European investors, UCITS ETFs provide diversified access to Eurozone government, corporate, and sustainable bonds, but yield comes with varying levels of risk, from safer government bonds to higher-yielding but riskier AT1/CoCos.

For US investors, the situation is more complex: UCITS ETFs are not directly accessible due to regulatory restrictions, but US-listed international bond ETFs can offer partial exposure to European debt markets. While these don’t perfectly replicate Euro bond indices, they provide a practical alternative for diversification.

Ultimately, your choice should depend on your risk tolerance, investment horizon, and preferred broker. Whether you are looking for stability, yield, or sustainability, there’s an ETF solution that fits.