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The Vanguard Long-Term Corporate Bond ETF is a fine idea for fixed income investors who want extra income. The Vanguard Long-Term Treasury ETF is an option for those who want to avoid credit risk.
Vanguard Long-Term Corporate Bond ETF and Vanguard Long-Term Treasury ETF both feature identical and highly efficient expense ratios of 0.03%. Vanguard Long-Term Corporate Bond ETF provides a higher trailing-12-month dividend yield of 5.60% compared to 4.60% for the Treasury fund.
iShares 10+ Year Investment Grade Corporate Bond ETF and Vanguard Long-Term Corporate Bond ETF both provide exposure to high-quality corporate debt with maturities exceeding 10 years Vanguard Long-Term Corporate Bond ETF carries a lower expense ratio and a higher trailing-12-month dividend yield than the iShares fund Both funds launched in 2009 and have experienced nearly identical maximum drawdowns of approximately 34% over the last five years
There is an old rule in lending that a name on the door is worth less than a claim on the cash. Bond investors who spent two years buying data-centre debt on the strength of the tenant rather than the structure are now relearning it.
The Vanguard Long-Term Bond ETF (NYSEARCA:BLV) is the kind of fund retirees gravitate toward: a long-duration, investment-grade bond index ETF that has paid a monthly distribution for 230 consecutive months since May 2007.
Highly rated debts offer high yields but are priced close to perfection.
A little-known investing formula shows exactly how long to hold bonds to neutralize interest-rate hikes.
The Vanguard Long-Term Corporate Bond ETF faces heightened risk from prolonged geopolitical conflict and inflation expectations anchoring above the Fed's comfort zone. VCLT's long duration and average 22-year maturities make it highly sensitive to yield curve shifts, Fed rate trajectory, and credit spread movements. Current BBB credit spreads are historically tight despite looming risks from higher energy prices and potential earnings pressure on corporates.