Latest news with #VanguardLong-TermBondETF
Yahoo
23-06-2025
- Business
- Yahoo
BND Is a Great Choice for Most, but I Like BLV ETF Better
While BND provides broad exposure to the entire investment-grade bond market, BLV concentrates on longer-term bonds. Long-term bonds tend to have higher yields. While they have more exposure to interest rates, that should benefit BLV as rates fall. 10 stocks we like better than Vanguard Total Bond Market ETF › The Vanguard Total Bond Market ETF (NASDAQ: BND) is the biggest exchange-traded fund (ETF) focused on the bond market, with over $129.5 billion of assets under management. As the name suggests, BND provides investors with broad exposure to the bond market. It holds taxable investment-grade U.S. dollar-denominated bonds, excluding inflation-protected bonds, with a range of maturities. For many investors, it's the only bond ETF they'll need. While I like BND and hold some in my portfolio, I like the Vanguard Long-Term Bond ETF (NYSEMKT: BLV) even better. Here's why. The Vanguard Long-Term Bond ETF provides investors with diversified exposure to the long-term, investment-grade U.S. bond market. Long-term bonds are those with maturities of 10 years or more into the future. Historically, interest rates on long-term bonds are higher than those with shorter maturities. The fund holds 3,058 bonds from a variety of issuers. More than half of its bonds (51.5%) are from the U.S. government. The rest are bonds rated AAA (1.2%), AA (5.5%), A (20.4%), and BBB (21.3%) from issuers in the industrial (29.6%), finance (7.5%), and utility (6%) sectors or from foreign (2.9%) and other (2.5%) issuers. Overall, BLV holds a broad collection of high-quality long-term bonds. While BND also holds bonds with longer-dated maturities, a larger percentage of its holdings are short-term bonds. Here's a look at how these two bond ETFs differ by holding: Maturity BND BLV Under 1 year 0.3% 0.1% 1-5 years 43.7% 0% 5-10 years 36.1% 0.3% 10-15 years 3.3% 11.9% 15-20 years 5.6% 30.5% 20-25 years 4.2% 21.5% Over 25 years 6.8% 35.7% Data source: Vanguard. BLV currently has an average effective maturity of 22.2 years, more than double that of BND's 8.2-year average effective maturity. By holding primarily longer-dated bonds, BLV has a higher yield than BND, with a 5.4% yield to maturity compared with 4.7%. That higher yield enables me to generate more interest income from my bond investments. BLV's higher yield has added up to higher returns for investors over the long term. Here's a look at how its returns have compared to those of BND: ETF 1-Year 3-Year 5-Year 10-Year Since Inception (4/3/07) BND 5.4% 1.5% -0.9% 1.5% 3% BLV 1.6% -2.3% -5.2% 1.2% 4.1% Data source: Vanguard. BND has delivered a better performance than BLV over shorter periods because of the greater impact of interest rate changes on long-term bond prices. We can measure this impact by comparing the average duration of these two bond ETFs. Duration measures the sensitivity of bond fund prices to interest rate movements. For example, a bond with a duration of two years will fall by 2% for every one percentage point increase in interest rates or rise by 2% for every one-percentage-point decline in interest rates. BND has an average duration of 5.8 years, while BLV's is 13.1 years. With a higher duration, BLV is much more sensitive to short-term interest rate changes. While its longer duration has affected it in recent years as rates rose, BLV has delivered a higher return over the long term when rates were lower. Given its currently higher yield and the fact that rates should continue falling, the ETF should deliver higher returns compared to BND from here. BND is the biggest bond ETF for a reason. It provides broad exposure to the entire U.S. bond market. That makes it a great choice for most investors. However, I like BLV better because it focuses on holding longer-term bonds with higher yields. While it has more exposure to changes in interest rates in the short term, it should provide me with more bond income over the long haul. Before you buy stock in Vanguard Total Bond Market ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Vanguard Total Bond Market ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $664,089!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $881,731!* Now, it's worth noting Stock Advisor's total average return is 994% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 23, 2025 Matt DiLallo has positions in Vanguard Long-Term Bond ETF and Vanguard Total Bond Market ETF. The Motley Fool has positions in and recommends Vanguard Total Bond Market ETF. The Motley Fool has a disclosure policy. BND Is a Great Choice for Most, but I Like BLV ETF Better was originally published by The Motley Fool
Yahoo
04-06-2025
- Business
- Yahoo
Here Are the 3 Highest-Yielding Vanguard ETFs. Are They Smart Picks for Income Investors?
The Vanguard Emerging Markets Government Bond ETF focuses on bonds issued by the governments in emerging markets. The Vanguard Long-Term Corporate Bond ETF invests primarily in long-term, investment-grade corporate bonds. The Vanguard Long-Term Bond ETF focuses on long-term government and corporate bonds. 10 stocks we like better than Vanguard Emerging Markets Government Bond ETF › Exchange-traded funds (ETFs) are sort of like ice cream: There's a flavor that should appeal to every person. I think that's especially true with the Vanguard family of funds. Vanguard offers 93 ETFs. Income investors should be able to find several in the group that they like. If you're looking for juicy yields, a few funds especially stand out. Here are the three highest-yielding Vanguard ETFs. The Vanguard Emerging Markets Government Bond ETF (NASDAQ: VWOB) easily ranks at the top of the list. This ETF's 30-day SEC yield (the net investment income per share over a 30-day period, divided by the maximum share price on the last day of the period) is a lofty 6.46%. Like many Vanguard ETFs, the Vanguard Emerging Markets Government Bond ETF attempts to track the performance of an index -- in this case, the Bloomberg USD Emerging Markets Government RIC Capped Index. As you can probably guess from their names, this ETF and its associated index focus on bonds issued by governments in emerging markets. The Vanguard Emerging Markets Government Bond ETF owns 781 bonds. Roughly 96.7% of these bonds were issued by the governments of emerging nations such as Argentina and Mexico. The remaining bonds were issued by governments in Europe, the Middle East, North America, and other countries. This Vanguard ETF has delivered a total return of 7.62% over the last 12 months. However, that's higher than normal. Since its inception on May 31, 2013, the fund's average annual total return is 3.02%. Fees aren't a big problem with this ETF, though. Its annual expense ratio is only 0.15%. The Vanguard Long-Term Corporate Bond ETF (NASDAQ: VCLT) offers a 30-day SEC yield of 5.98%. That's enough to make it the second-highest-yielding ETF in the Vanguard lineup. This Vanguard fund invests primarily in long-term, investment-grade corporate bonds. It currently owns 2,604 bonds with an average effective maturity. The Vanguard Long-Term Corporate Bond ETF targets a dollar-weighted average maturity of between 10 and 25 years. Many of the corporate bonds in this Vanguard ETF's portfolio have attractive coupon rates. For example, one bond issued by Goldman Sachs has a coupon rate of 6.75%. However, some bonds have lower coupon rates, such as the 2.525% rate for a bond in the portfolio issued by Microsoft. The total return of the Vanguard Long-Term Corporate Bond ETF over the last 12 months is 2.68%. That's below the average total return since the fund's inception on Nov. 19, 2009, of 4.45%. One plus for this ETF, though, is that it has an exceptionally low annual expense ratio of 0.03%. Keeping with the bond trend we have going, the third-highest yield in the Vanguard family belongs to the Vanguard Long-Term Bond ETF (NYSEMKT: BLV). This fund offers a 30-day SEC yield of 5.47%. The Vanguard Long-Term Bond ETF attempts to track the performance of the Bloomberg U.S. Long Government/Credit Float Adjusted Index. It provides diversified exposure to the U.S. bond market with a focus on long-term, investment-grade bonds. This ETF's portfolio includes 3,060 bonds with an average effective maturity of 22.2 years. Over half (51.9%) of these bonds were issued by the U.S. government. Most of the others are corporate bonds. The Vanguard fund's total return over the last 12 months is only 1.64%. However, since its inception on April 3, 2007, the ETF has delivered an average annual total return of 4.09%. Its annual expense ratio of 0.03% is also very low. I think these three Vanguard ETFs are smart picks for income investors. They come with some risks to know about, though. For example, the Vanguard Emerging Markets Government Bond ETF could have a higher risk of default than some bond funds. And all three ETFs could experience volatility with interest rate swings. Also, as we have seen, these Vanguard funds don't always deliver great total returns. But for investors seeking income, the Vanguard Emerging Markets Government Bond ETF, the Vanguard Long-Term Corporate Bond ETF, and the Vanguard Long-Term Bond ETF could be good additions to a diversified portfolio. Before you buy stock in Vanguard Emerging Markets Government Bond ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Vanguard Emerging Markets Government Bond ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $657,385!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $842,015!* Now, it's worth noting Stock Advisor's total average return is 987% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Keith Speights has positions in Microsoft. The Motley Fool has positions in and recommends Goldman Sachs Group and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Here Are the 3 Highest-Yielding Vanguard ETFs. Are They Smart Picks for Income Investors? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
