Bond ETFs invest in the bonds, or debt, of companies, governments, central banks, or a combination of the three. Bond ETFs can add stability and reduce volatility of a portfolio. Additionally, bond ETFs often pay steady and predictable coupon payments. To decide their holdings, bond ETFs can employ a variety of different strategies that focus on different traits of bonds, including maturity, duration, and coupon payments. Bond ETFs trade throughout the day on a centralized exchange, making them more liquid than individual bonds or bond mutual funds. Individual bonds are sold over-the-counter by brokers, while bond mutual funds are only priced at the end of each trading day.