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Which Vanguard Bond Fund Is Right for You?

In Vanguard’s large stable of bond funds, not all make the cut

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Intermediate-Term Investment-Grade: Buy

VFICXchartExpenses: 0.2%

Given where interest rates are right now, I’d go for the higher yields and better returns from Vanguard Intermediate-Term Investment-Grade Fund (VFICX).

As with Intermediate-Term Treasury, this fund generally gives the advantage of decent returns with only mid-range interest-rate risk. The difference is that this actively managed fund typically focuses on corporate bonds, with less than 10% of the portfolio in interest-rate-sensitive government-backed bonds. The result is a higher yield — 2.18% compared to 0.8% for Intermediate-Term Treasury, or a pickup of 138 basis points.

If I had to buy just one straight intermediate-term bond fund, this would be it.

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