Wall Street is doubling down on their bond bets for 2024. The notion that rate cuts are finally coming in 2024 spurs this movement. That said, here are a trio of exchange traded funds (ETFs) from Vanguard worth noting.
“Consensus on Wall Street is that interest rates have peaked for this economic cycle, and the pain bondholders experienced in 2022 and 2023 has likely ended,” the Wall Street Journal reported. “That should make further investments in Treasurys and highly rated corporate bonds a good bet, analysts and portfolio managers said, even if this year brings significant volatility across markets.”
As Wall Street ups the ante on bond exposure, one fund to consider for broad-based exposure is the Vanguard Total Bond Market Index Fund ETF Shares (BND ). As its name states, BND provides total exposure to a vast array of bonds. Is adds in built-in diversification to an investor’s fixed income portfolio in one ETF. Additionally, it carries a low expense ratio of just 0.03%. It’s a current 30-day SEC yield (as of January 8) of 4.33%.
Per its baseline fund description, BND seeks the performance of the Bloomberg Barclays U.S. Aggregate Float Adjusted Index. That index represents a wide spectrum of public, investment-grade, taxable, fixed income securities in the U.S., including government, corporate, and international dollar-denominated bonds. Additionally, it has mortgage-backed and asset-backed securities, all with maturities of more than one year.
2 Other Options for Bond Exposure
Investors looking to diversify their current bond portfolios with corporate debt can opt for the Vanguard Total Corporate Bond ETF ETF Shares (VTC ). The fund seeks to track the performance of the Bloomberg U.S. Corporate Bond Index, which measures the investment-grade, fixed-rate, taxable corporate bond market. The fund carries a low 0.04% expense ratio and a 30-day SEC yield of 3.88% as of January 8.
For the risk-averse, Vanguard Intermediate-Term Treasury Index Fund ETF Shares (VGIT ) gives investors exposure to safer debt issues with Treasury notes. Per the fund description, VGIT seeks to track the performance of a market-weighted Treasury index with an intermediate-term dollar-weighted average maturity.
VGIT utilizes an indexing investment approach that is designed to track the performance of the Bloomberg U.S. Treasury 3-10 Year Bond Index. This index includes fixed income securities issued by the U.S. Treasury (not including inflation-protected bonds) with maturities between three and 10 years. VGIT also carries a low 0.04% expense ratio and a 30-day SEC yield of just over 4% as of January 8.
For more news, information, and analysis, visit the Fixed Income Channel.