Vanguard Long-Term Corporate Bond ETF

VCLT tracks a market-weighted index of investment-grade fixed-rate corporate bonds with maturities greater than 10 years.

VCLT tracks the Bloomberg U.S. 10+ Year Corporate Bond Index, managing $15.29B with a low expense ratio of 0.04% and high rate sensitivity. The fund's performance seems to have been influenced by various economic conditions and Fed policies, with significant losses in 2018 and 2022, probably due to rate hikes. Stabilizing economic conditions and potential rate cuts could improve industrial credit quality, making VCLT an attractive option.

VCLT: High Yield And Rate Sensitivity

Vanguard Intermediate-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

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Two ETFs VCLT and EPI traded with an outsized volume on Wednesday.

2 ETFs to Watch for Outsized Volume on Corporate Bond & India

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Income investors will find a lot to like with these Vanguard exchange-traded funds.

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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

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

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The first cut is the deepest — so they say. As with all complicated relationships, this mantra may certainly ring true for the Federal Reserve and the markets — at least from a psychological standpoint.

Positioning Ahead of the Fed: ETFs for a Lower Rate Era

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 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

iShares Core U.S. Aggregate Bond ETF

Invesco BulletShares 2034 Corporate Bond ETF

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iShares iBoxx $ Investment Grade Corporate Bond ETF

Schwab Short-Term US Treasury ETF

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In the first half of 2024, fixed income ETFs represented 29% of the U.S. industry's flows. This is encouraging as the asset category represents just 18% of the asset base.

Fixed Income ETFs Support Range of Advisor Objectives

Schwab Long-Term US Treasury ETF

Schwab Intermediate-Term US Treasury ETF

Vanguard Intermediate-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?

VCLT has performed well since October 2023, with a 13.2% total return and a 5.8% 30-day SEC yield. Inflation has improved but is still above the Federal Reserve's target. While U.S. treasury funds may be the better choice for short-term investors, long-term income investors should continue to own VCLT.

VCLT: Not Suitable For Short-Term Investing Now But Still Okay For Long-Term Investors

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 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

Downward pressure on bond prices from high interest rates is starting to ease. This opens opportunities for institutional investors to return to bonds again.

Institutional Investors Are Going Long on Bonds Again

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

The higher-for-longer interest rate narrative continues to play out as the U.S. Federal Reserve opted to once again keep rates unchanged. Rather than wait for interest rate cuts, some companies are opting to simply offload debt, which could be a boon for corporate bonds.

As Companies Offload Debt, Consider Corporate Bonds

The demand for corporate bonds is extending beyond the need for yield. As credit quality conditions improve for corporate bonds, they also offer credit risk mitigation in tandem with higher yield versus safe haven government debt.

Higher Credit Quality Increases Demand for Corporate Bonds

First Trust TCW Opportunistic Fixed Income ETF

GS ETF Trust Shs Access High Yield Corp Bond Fund

iShares iBoxx High Yield Corporate Bond ETF

American Century Multisector Income ETF

RiverFront Strategic Income Fund

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?

Schwab 5-10 Year Corporate Bond ETF

iShares Broad USD Investment Grade Corporate Bond ETF

A record amount of money has flooded into the U.S. corporate bond markets this year, as investors rush to lock in the highest yields years ahead of the Fed rate cuts.

Time to Invest in Corporate Bond ETFs

A flurry of investor interest is taking place in the corporate bond market. As the central bank reiterated its intention to institute rate cuts after a recent pause, investors could be scrambling for more yield before that proverbial window of opportunity closes.

Corporate Bonds See Heightened Interest Ahead of Rate Cuts

The risk-on sentiment in equities could also be permeating into bonds. According to Reuters, more investors are willing to take on credit risk to attain yield, but there are other exchange-traded fund (ETF) options to consider.

News for Vanguard Long-Term Corporate Bond ETF ETF (VCLT)