Best Index Funds #5: Vanguard Short-Term Bond ETF (BSV)
1-Year Performance: 0.64%
5-Year Performance: 13.2% (annualized)
Expense Ratio: 0.1%
If you’re strictly following the Warren Buffett model, you will need to have a fund to park some cash and offer a bit of diversification to your holdings. One of the best index funds to do just that is the Vanguard Short-Term Bond ETF (BSV).
This ETF is pegged to the Barclays U.S. 1-5 Year Government/Credit Float Adjusted Index, which includes all medium- and large-issue government, investment-grade corporate and investment-grade international dollar-denominated bonds with maturities between one and five years.
The short-term segment of the bond market is essentially a way to shield your money from volatility and risk, and that makes it a good choice for ready reserve cash.
As of this writing, Jim Woods was long VTI and IWM.