Vanguard Intermediate-Term Corporate Bond ETF

VCIT tracks a market-weighted index of investment-grade corporate bonds with maturities of 5-10 years.

The fund tracks a market value-weighted index of US investment grade corporate bonds with maturities of 5-10 years.

VCIT offers a conservative interest rate play because of its investment-grade corporate bonds, moderate rate sensitivity, and high yield. The ETF's past performance is strongly correlated to monetary policy shifts, so it establishes a strong case for using it to position a portfolio right now. However, there are risks you should keep in mind and protect yourself from, such as a faster or even slower pace in policy rate reductions.

VCIT: High Credit Quality, Decent Yield, And Moderate Rate Sensitivity

Fixed income is becoming an increasingly attractive asset class, especially given the recent surge in yields following the outcome of the U.S. elections. We view this as an opportunity to reiterate our bullish view on investment-grade fixed income, as we expect the asset class to deliver superior risk-adjusted returns in the next 1-3 years. Many analysts interpret the recent surge in yields as a reflection of growing concerns that Trump's proposed policies will lead to widening fiscal deficits and stoke inflationary pressures.

VCIT: Yields Are Looking Attractive Again

Vanguard Long-Term Corporate Bond ETF

Vanguard Short-Term Corporate Bond ETF

With the expectation that the Federal Reserve will continue to cut interest rates, corporations proceeded to issue more bonds in Q3. Given this, fixed income investors have options, including three from Vanguard.

Get Corporate Bond Exposure 3 Ways After Q3 Issuance

Vanguard Intermediate-Term Treasury ETF

With the expectation that the Federal Reserve will be able to deftly guide the economy into a soft landing, the spread between corporate bonds and safe haven Treasuries has been narrowing. As the Financial Times noted, the spread between the two has narrowed to its smallest gap since March 2005, or almost 20 years.

Spread Narrowing Between Corporate Bonds & Treasuries

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Investors may be anxious with potential short-term volatility on the horizon. But opportunities do exist in the fixed income space.

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Rate cut expectations pushed more investors into investment-grade corporate bonds the past quarter, giving the asset class their best performance in nearly a year. “US high-grade corporate bonds logged their first quarterly gain this year in the past three months, returning 5.

High-Quality Corporate Bonds Notch Best Quarter of the Year

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I recently wrote about a trend that's making income investors excited: After years of failing to produce decent returns, bonds are back.

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Rate cuts can produce a macroeconomic environment conducive to corporate bonds, allowing companies to borrow more money at lower rates. This could see more investors move into corporate bonds for greater yield opportunities.

Rate Cuts Could See More Investors in Corporate Bonds

Vanguard Intermediate-Term Bond ETF

The question of whether the economy is in a recession or not, a forthcoming presidential election, and interest rates add to the high level of uncertainty in the current market. As such, fixed income investors may want to take a middle-ground approach with bonds and opt for debt with intermediate maturity dates.

With Uncertainty Ahead, Intermediate Bonds Offer Opportunities

Despite the heavy volatility during the month of August, ETFs saw a record number of inflows. This includes bond-focused funds, which are offering opportunities in corporate debt.

Higher ETF Inflows Could Benefit Corporate Bond Funds

The closing gap in credit spreads after the August 5 sell-off is bringing corporate bonds back into the spotlight. Those looking for an intermediate bond ETF with yield opportunities and a muted credit risk profile should take a closer look at the Vanguard Interim-Term Corporate Bond ETF (VCIT).

An Intermediate Bond ETF With Yield and Muted Credit Risk

The August 5 sell-off may have spooked investors from riskier assets, but tightening credit spreads between high-quality and high-risk bonds shows that investors may be returning to corporate bonds again. A weak July jobs report sparked recession fears, spurring a flight to safe haven assets like Treasuries.

Tightening Credit Spreads Bring Corporate Bonds Back

Whether it's due to a correction or potential recession, the stock market is certainly experiencing a heavy dosage of volatility. Given this, it's an ideal time to add bonds, especially if they are poised to outperform stocks over the next 10 years.

Bonds Could Be Poised to Outperform Stocks in Next Decade

When looking to pair yield and credit quality, corporate bonds are an ideal option, especially when it comes to investment-grade. Additionally, investors also laud the diversification benefits they offer to a fixed income portfolio.

Higher Yields, Diversification Driving Demand for Corporate Bonds

Schwab Long-Term US Treasury ETF

Schwab Intermediate-Term US Treasury ETF

SPDR Portfolio Long Term Treasury ETF

Vanguard Long-Term Treasury ETF

Investors took refuge in short-term Treasury bonds throughout 2023, where they reaped the rewards of higher-yielding money markets. Meanwhile, longer duration Treasuries have been mired in a bear market since 2020 but could finally start to see a reversal of fortune.

Going Longer: Deeper Rotation Into Duration?

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iShares Broad USD High Yield Corporate Bond ETF

Taking on credit risk but not interest rate risk has been relatively rewarding to ETF advisors and investors thus far in 2024. The iShares Broad USD High Yield Corporate Bond ETF (USHY) had a year-to-date total return of 3.6% as of July 8.

What Advisors Find Appealing in Fixed Income for 2H

With a forthcoming election paired with the expectation of rate cuts, the bond market could see volatility in the second half of 2024. That said, investors may want to opt for a middle-ground solution for yield and rate risk with intermediate-term bond funds.

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Corporate bonds continue to garner interest as investors may be locking in current yields now before eventual rate cuts take place. In the meantime, it's an ideal time to consider corporate bond funds, especially given the attractive yields.

3 ETFs That Meet Rising Demand for Corporate Bonds

Vanguard Intermediate-Term Corporate Bond ETF invests in investment grade corporate bonds with weighted average maturity of 5 to 10 years. VCIT aims to provide moderate and sustainable current income with a low annual cost of 0.04% to unitholders. We will tell you why this fund is likely to beat equities and how you can beat this fund.

VCIT: A Good Way To Beat Equities, But You Can Beat This One Yourself

Vanguard Total Corporate Bond ETF

Fixed income investors looking for the dual benefit of price appreciation and high yields need not look any further than corporate bonds ETFs. Three offerings from Vanguard can suit investors as stand-alone exposure or for bond laddering purposes.

Yield, Potential Price Rally Draw Investors to Corporate Bonds

As the capital markets brace for potential rate cuts before the end of the new year, investor demand is building for corporate bonds, leading businesses to issue more debt from investment-grade to high yield.

Investor Demand Spurs Businesses to Issue More Bonds

As a Wall Street Journal report noted, corporate profits are on the rise after a majority of companies have reported their first-quarter earnings. In turn, this could bring more fixed income investors to corporate bonds if the profit outlook remains rosy.

Rosy Corporate Earnings Outlook Could Fuel These ETFs

Fixed income investors these days may be tasked with looking for opportunities that can provide the best blend of yield, while at the same time mitigating rate risk. The melding of those two benefits is available in the Vanguard Intermediate-Term Bond ETF (BIV).

Balanced Yield and Rate Risk With This Bond ETF

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In the first quarter of 2024, fixed income investors turned to investment-grade corporate bond ETFs. The Vanguard Intermediate-Term Corporate Bond ETF (VCIT) pulled in $2.3 billion, while the Vanguard Long-Term Corporate Bond ETF (VCLT) added $1.5 billion.

How Much Credit Risk Should You Take On?

Investors appear to be taking a Goldilocks-like approach to bonds — not too short and not too long. According to a Reuters report, investors have been opting for intermediate term-bonds funds of the Treasury variety as uncertainty over the U.S. Federal Reserve's policy looms.

News for Vanguard Intermediate-Term Corporate Bond ETF ETF (VCIT)