Tech stocks, especially those focusing on AI, may be at the top of investors’ mind when it comes to equities. But bonds have also been in the limelight as of late. Demand has been increasing as investors look to lock in yields at the current rates before the Fed loosens monetary policy.
“There’s been an uptick in retail investors buying bonds over the past two years as interest rates have gone up — giving investors access to higher yields,” a MarketWatch report confirmed. “A lot of this buying has centered around Treasury bills BX:TMUBMUSD03M, but investors are also branching out and investing in corporate bonds, too.”
Investors also looking for that ultra-short exposure to park cash can take a look at the Vanguard Ultra-Short Bond ETF (VUSB ). The fund has a 30-day SEC yield of 5.17%, as of July 16, with a 0.10% expense ratio. It presents a compelling alternative to a money market account that earns interest. Furthermore, VUSB is actively managed. That allows for flexibility in the ultra-short-term bond market.
For those wanting to add more debt with longer maturities than ultra-short bonds, there’s the Vanguard Short-Term Treasury ETF (VGSH ). It offers ideal exposure to short-term Treasury notes, focusing on maturity dates that fall within one to three years. It has a 30-day SEC yield of 4.72%. The fund features a low 0.04% expense ratio.
Fixed income investors looking to maximize yield may want to consider corporate bonds or more specifically, the Vanguard Short-Term Corporate Bond Index Fund ETF Shares (VCSH ). It seeks to track the the performance of the Bloomberg U.S. 1-5 Year Corporate Bond Index. The index includes U.S.-dollar-denominated, investment-grade, fixed-rate, taxable securities issued by industrial, utility, and financial companies, with maturities between one and five years. The fund has a 30-day SEC yield of 5.15% paired with a low expense ratio of 0.04%.
A Little Bit of Everything With Bond ETF BSV
Not sure where to start when getting short-term bond exposure? The Vanguard Short-Term Bond Index Fund ETF Shares (BSV ) can essentially provide the prospective fixed income investor with a little bit of everything.
The fund seeks to track the performance of the Bloomberg U.S. 1-5 Year Government/Credit Float Adjusted Index. This index includes a diverse array of bond exposures. They include all medium and larger issues of U.S. government, investment-grade corporate, and investment-grade international-dollar-denominated bonds that have maturities between one and five years and are publicly issued. BSV boasts a 30-day SEC yield of 4.71% as well as a low expense ratio of 0.04%.
For more news, information, and analysis, visit the Fixed Income Channel.
