Vanguard Short-Term Corporate Bond ETF
I know: I’ve pooh-poohed bond funds, and do prefer individual bond purchases instead. But for investors who have to be in bonds right now to tamp down risk exposure, it’s worth staking out a position in the Vanguard Short-Term Corporate Bond ETF (VCSH).
The returns on the VCSH aren’t amazing, especially after the fund plunged to a 52-week low amid uncertainty about Federal Reserve policies … of course, “plunged” has only been a difference of about 2%. But much like its price oscillations aren’t big, neither are its distributions — at 1.4%, VCSH actually yields less than the broader market or the 10-year T-note.
However, short-duration corporates are good as a long-term play thanks to their reduced interest-rate risk, and certainly aren’t going to be battered around nearly as much as Treasuries amid possibly rising interest rates and tapering to QE in the next year or so.
As is Vanguard’s style, expenses for VCSH are a very low 0.12%. VCSH makes distributions monthly.