Vanguard Bond Funds to Buy for Higher Rates: Vanguard Core Bond Fund (VCORX)
Expenses: 0.25%, or $25 annually per every $10,000 invested
Minimum Initial Investment: $3,000
Broadly diversified, actively-managed bond funds are smart choices when interest rates are rising and this makes Vanguard Core Bond Fund (MUTF:VCORX) one of the best Vanguard bond funds to buy now.
The fact that VCORX is one of the newest funds in Vanguard’s lineup (inception was March 28, 2016), suggests that Vanguard knows that the smart money tends to shift assets away from passive to active funds when rates are rising.
One move an active manager can do that index fund managers can’t in the fixed income universe is to sell off bonds that are more interest rate-sensitive, such as those with longer durations, in the face of rising rates.