Vanguard Bond Funds to Buy for Higher Rates: Vanguard Intermediate-Term Bond Index (VBIIX)
Minimum Initial Investment: $3,000
Investors that prefer passive management over active management are smart to look at funds like Vanguard Intermediate-Term Bond Index (MUTF:VBIIX).
Long-term bond funds are more interest rate-sensitive than intermediate-term bond funds but short-term bond funds have lower yields. Because of this, the sweet spot for many investors with holding periods of more than a few years is intermediate-term bond funds. And if you want passive management, VBIIX is arguably the best bond fund for you.
VBIIX has a good balance of about 50% government securities and 50% corporate bonds.