Latest news with #VanguardTotalBondMarketETF
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
19-06-2025
- Business
- Yahoo
$1,000 in AGG Could Turn Into $4,200
The iShares Core U.S. Aggregate Bond ETF provides investors with broad exposure to the bond market. The bond ETF has a lower risk and lower return profile. It can help investors diversify their portfolios and reduce risk. 10 stocks we like better than iShares Trust - iShares Core U.s. Aggregate Bond ETF › The iShares Core U.S. Aggregate Bond ETF (NYSEMKT: AGG) is one of the biggest exchange-traded funds (ETFs) focused on the bond market. AGG has over $126 billion in total assets under management (AUM). That puts it right behind the Vanguard Total Bond Market ETF, which leads with over $129 billion in AUM. Investing in bonds (either directly or indirectly through ETFs like AGG) helps investors build a more diversified portfolio and generate income, which helps lower risk. Here's a look at how much an investment of $1,000 in AGG could turn into in the future and why investors would want to consider investing in a bond ETF. The iShares Core U.S. Aggregate Bond ETF, or AGG, provides investors with broad exposure to U.S. investment-grade bonds. Investment-grade bonds are fixed-income investments with a lower risk of defaulting than non-investment-grade or junk bonds. They enable investors to lower the risk profile of their portfolio and generate investment income. This fund currently holds over 12,600 bonds with maturities of as much as 20-plus years in the future. It has U.S. Treasury Bonds (45% of its holdings); mortgage-backed securities or MBS (24% backed by residential mortgage, and 1.5% backed by commercial mortgages); bonds issued by corporations (14% industrial, 8% financial institutions, and 2% utilities); and other bonds, including U.S. dollar bonds issued by foreign countries (1%) and municipal bonds (less than 1%). This broad exposure to the entire investment-grade bond market further reduces this ETF's risk profile. Those who have invested for a while know that there are always trade-offs. In the case of AGG, the trade-off is that the bond ETF's very low-risk profile comes with lower return potential. For the most part, the interest income paid by its bond holdings makes up its entire return. Since its inception in 2003, AGG has delivered an average annual return of only 3.1%. It would have grown a $1,000 investment into over $1,800 at that rate. That assumes an investor reinvested the interest income paid by the ETF into buying more shares. However, interest rates are higher today than they've been throughout much of this ETF's history. As a result, its current bond portfolio has an average yield to maturity of almost 4.8% (just below the historical average bond return of 5% over the last century). The fund could turn a $1,000 investment into more than $4,200 in about 30 years at that higher return rate. The caveat is that while interest rates are currently higher, they might not be as high in the future. On the other hand, interest rates could also stabilize at an even higher level, enabling investors to generate even more income from this fund. Adding bonds to your portfolio can be a wise idea. While bonds have a lower return profile, they can also help significantly reduce the volatility of your portfolio. Here's a look at how adding a bond fund like AGG can help reduce risk without significantly sacrificing returns: Portfolio Allocation Best Annual Return Worst Annual Return Average Annual Return 100% stocks/0% bonds 54.2% -43.1% 10.5% 80% stocks/20% bonds 45.4% -34.9% 9.7% 60% stocks/40% bonds 36.7% -26.6% 8.8% 50% stocks/50% bonds 32.3% -22.5% 8.2% 40% stocks/60% bonds 27.9% -18.4% 7.7% 20% stocks/80% bonds 29.8% -14.4% 6.4% 0% stocks/80% bonds 32.6% -13.1% 5% Data source: Vanguard. NOTE: Returns data from 1926 to 2024. As that chart shows, adding bonds to your portfolio (i.e., buying AGG) will lower your return potential. However, it will also help cushion the blow of a very bad year in the market. Most financial advisors recommend that investors allocate a portion of their portfolio to bonds. The traditionally recommended allocation for a balanced portfolio is 60% stocks and 40% bonds. However, younger investors might want to hold a higher percentage of their portfolio in stocks, while older investors should consider a higher allocation to bonds. One good rule of thumb is that you should allocate your age to bonds (e.g., if you're 25, then you should consider having a 25% allocation to bonds). Buying an ETF like AGG isn't about maximizing the value of your investment. Instead, you'd invest $1,000 into AGG to help lower the risk profile of your portfolio. Investing $1,000 into AGG won't grow it into a huge future windfall like a similar investment in a stock ETF might achieve. However, it should produce steady income while helping lower the risk profile of your entire portfolio. For many investors, that would enable them to still reach their financial goals while potentially having fewer sleepless nights worrying about stock market volatility. Before you buy stock in iShares Trust - iShares Core U.s. Aggregate Bond ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and iShares Trust - iShares Core U.s. Aggregate 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 $658,297!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $883,386!* Now, it's worth noting Stock Advisor's total average return is 992% — 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 9, 2025 Matt DiLallo has positions in Vanguard Total Bond Market ETF and iShares Trust - iShares Core U.s. Aggregate Bond ETF. The Motley Fool has positions in and recommends Vanguard Total Bond Market ETF. The Motley Fool has a disclosure policy. $1,000 in AGG Could Turn Into $4,200 was originally published by The Motley Fool
Yahoo
11-06-2025
- Business
- Yahoo
SPY Attracts $3.1B in Assets as Trade Talks Continue
The SPDR S&P 500 ETF Trust (SPY) pulled in $3.1 billion on Tuesday, boosting its assets under management to $612.7 billion, according to data provided by FactSet. The inflows came as the S&P 500 rose 0.6% during the third consecutive day of gains while U.S. and Chinese officials continued trade talks in London for a second day. The Vanguard Total Bond Market ETF (BND) attracted $600.2 million, while the Vanguard Tax-Exempt Bond ETF (VTEB) gained $450.1 million. The iShares Core U.S. Aggregate Bond ETF (AGG) collected $399.4 million, and the SPDR Portfolio S&P 500 Growth ETF (SPYG) pulled in $375.1 million. The SPDR Portfolio S&P 500 Value ETF (SPYV) lost $674 million, while the Vanguard Short-Term Corporate Bond ETF (VCSH) experienced outflows of $534.9 million. The Vanguard Long-Term Bond ETF (BLV) shed $465.3 million, and the Direxion Daily Semiconductor Bull 3x Shares (SOXL) lost $244.2 million. U.S. equity ETFs collected $3.2 billion in net inflows, while international equity ETFs gained nearly $573 million. International fixed-income ETFs attracted just under $363 million, and currency ETFs pulled in $252.3 million. Overall, ETFs gained $4.2 billion for the day. Ticker Name Net Flows ($, mm) AUM ($, mm) AUM % Change SPY SPDR S&P 500 ETF Trust 3,118.37 612,718.31 0.51% BND Vanguard Total Bond Market ETF 600.17 127,852.98 0.47% VTEB Vanguard Tax-Exempt Bond ETF 450.11 36,036.04 1.25% AGG iShares Core U.S. Aggregate Bond ETF 399.38 125,435.50 0.32% SPYG SPDR Portfolio S&P 500 Growth ETF 375.05 35,771.32 1.05% EWY iShares MSCI South Korea ETF 245.20 4,055.68 6.05% BNDX Vanguard Total International Bond ETF 237.08 66,326.35 0.36% VOO Vanguard S&P 500 ETF 222.18 668,725.67 0.03% JNK SPDR Bloomberg High Yield Bond ETF 172.05 7,366.98 2.34% TSLL Direxion Daily TSLA Bull 2X Shares 159.85 5,696.56 2.81% Ticker Name Net Flows ($, mm) AUM ($, mm) AUM % Change IVV iShares Core S&P 500 ETF -723.12 591,424.19 -0.12% SPYV SPDR Portfolio S&P 500 Value ETF -674.01 26,065.32 -2.59% VCSH Vanguard Short-Term Corporate Bond ETF -534.89 34,335.75 -1.56% BLV Vanguard Long-Term Bond ETF -465.27 5,610.18 -8.29% BIV Vanguard Intermediate-Term Bond ETF -446.93 22,585.17 -1.98% BSV Vanguard Short-Term Bond ETF -288.23 38,068.10 -0.76% LQD iShares iBoxx $ Investment Grade Corporate Bond ETF -278.75 28,989.50 -0.96% SOXL Direxion Daily Semiconductor Bull 3x Shares -244.15 12,323.69 -1.98% DIA SPDR Dow Jones Industrial Average ETF Trust -214.19 38,145.06 -0.56% VB Vanguard Small-Cap ETF -209.51 62,413.90 -0.34% Net Flows ($, mm) AUM ($, mm) % of AUM Alternatives -7.65 10,014.87 -0.08% Asset Allocation 18.82 25,066.68 0.08% Commodities ETFs 100.48 215,690.29 0.05% Currency 252.29 146,074.62 0.17% International Equity 572.98 1,824,467.50 0.03% International Fixed Income 362.97 293,815.63 0.12% Inverse -6.27 14,682.99 -0.04% Leveraged -75.87 123,330.78 -0.06% US Equity 3,175.91 6,902,538.49 0.05% US Fixed Income -222.72 1,662,261.93 -0.01% Total: 4,170.95 11,217,943.79 0.04% Disclaimer: All data as of 6 a.m. Eastern time the date the article is published. Data are believed to be accurate; however, transient market data are often subject to subsequent revision and correction by the | © Copyright 2025 All rights reserved Sign in to access your portfolio
Yahoo
03-06-2025
- Business
- Yahoo
2 ETFs I Plan to Buy in June to Increase My Passive Income
ETFs can make it easy to invest in different passive income strategies. The Vanguard Total Bond Market ETF provides broad exposure to high-quality bonds. The JPMorgan Nasdaq Equity Premium ETF generates income from writing call options. 10 stocks we like better than Vanguard Total Bond Market ETF › My long-term financial goal is to generate enough passive income to cover my basic living expenses. Once I reach my target, I won't have to work to pay my bills. I also won't have to sell stock during retirement to fund my financial needs. My strategy is pretty simple. I invest in income-generating assets each month as a march toward my passive income target. Exchange-traded funds (ETFs) are among the many vehicles I use on my journey to financial independence. Two that I plan to buy more of this June are Vanguard Total Bond Market ETF (NASDAQ: BND) and JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ: JEPQ). Here's why I'm using these two ETFs to increase my passive income. Investing in bonds is one of the lowest-risk ways to generate passive income. However, it takes more work to manage a bond portfolio than stocks. You need to learn about bond ratings, building a bond ladder, and other factors that can affect returns. In the process of doing just that, I've found that investing in bond ETFs is the best way to gain exposure to the bond market and the fixed income they can generate. One of my go-to bond ETFs is the Vanguard Total Bond Market ETF. The ETF provides broad exposure to taxable investment-grade U.S. dollar-denominated bonds. It holds bonds issued by the U.S. government, government agencies, U.S. corporations, and foreign companies and countries that issue bonds in U.S. dollars. This ETF currently holds nearly 11,350 bonds. Nearly 69% of those bonds are from the U.S. government or government agencies. Meanwhile, about 18% have A-rated credit or higher, while the remaining 13% are BBB-rated bonds. These are all higher-quality bonds with a relatively low risk of default. Because they have an average yield to maturity of 4.5% and an average effective maturity of 8.2 years, this ETF should provide a fairly stable stream of interest payments. It distributes the income it receives to investors each month. The Vanguard Total Bond Market ETF provides investors with broad exposure to high-quality bonds for a very reasonable price, given its ultra-low 0.03% expense ratio. That enables investors like me to keep more of the interest income produced by the bonds it holds. Writing covered calls is another strategy that many investors use to generate passive income. This technique can be very lucrative. However, it requires fairly active portfolio management. An easier way to collect options income is to invest in the JPMorgan Nasdaq Equity Premium Income ETF. The fund's management team writes out-of-the-money call options -- that is, those above the current price -- on the Nasdaq-100 Index. That strategy enables the ETF to generate income and distribute it to investors each month. It can be a very lucrative strategy: As that chart shows, the fund has a higher income yield than several other asset classes, including U.S. government bonds and riskier -- and higher-yielding -- junk bonds. The yield shown is an annualization of its last distribution payment, which was higher due to market volatility in the period. Over the past 12 months, the fund's yield is a little lower at 10.4%, which is still very lucrative. The options premium income the fund generates will rise and fall based on volatility and market pricing. However, it's an attractive place to potentially earn an outsized income stream. In addition to the passive income, the fund provides equity market exposure. It holds a portfolio of stocks selected by combining an applied data science approach to fundamental research. It aims to construct a portfolio that will produce less volatile returns than the Nasdaq-100 while still providing investors with upside potential. I like this ETF because it delivers a lucrative income stream and higher appreciation potential, which should help grow the value of my portfolio over the long term. I like to use ETFs to add more sources of passive income to my portfolio. I routinely buy more of these ETFs, which helps increase my passive income. This month, I'm buying more shares of Vanguard Total Bond Market ETF and JPMorgan Nasdaq Equity Premium Income ETF because they make it super easy to collect passive income from bonds and options. 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 $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor's total average return is 979% — 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 Matt DiLallo has positions in JPMorgan Nasdaq Equity Premium Income 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. 2 ETFs I Plan to Buy in June to Increase My Passive Income was originally published by The Motley Fool Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
04-05-2025
- Business
- Yahoo
3 Top ETFs I Plan to Buy in May for Passive Income
The Schwab U.S. Dividend Equity ETF holds 100 top high-yield dividend stocks. The JPMorgan Nasdaq: Equity Premium ETF generates income from writing call options. The Vanguard Total Bond Market ETF holds high-quality government and corporate bonds. I'm on a mission to produce more passive income. My strategy is to grow my passive income so that it can cover my basic living expenses. That would enable me to become financially independent and relieve the stress of needing to work to pay the bills. One aspect of my plan is investing in exchange-traded funds (ETFs) with strategies focused on generating income. Three of my favorites are Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD), JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ: JEPQ), and Vanguard Total Bond Market ETF (NASDAQ: BND). Here's why I plan to buy more of these top income-producing ETFs this May. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » The Schwab U.S. Dividend Equity ETF is a passively managed fund that tracks an index focused on companies that pay quality and sustainable dividends (Dow Jones U.S. 100 Index). The index's manager screens companies based on several quality characteristics, including dividend yield, dividend growth, and balance sheet strength. As a result, this ETF holds 100 high-quality, higher-yielding dividend stocks. The fund currently has a dividend yield of around 4%. That's more than double the S&P 500's (SNPINDEX: ^GSPC) dividend yield (currently less than 1.5%). Because of that, the ETF enables me to generate more passive income from each dollar I invest (every $100 invested would produce about $4 in annual passive income). Dividend growth is also important for this fund. As a result, it has steadily paid out higher distributions to investors: That high-yielding income stream should continue rising in the future. This means the ETF can supply me with an above-average and growing stream of dividend income. The JPMorgan Nasdaq Equity Income ETF has a two-pronged investment strategy. It aims to distribute income to investors each month. The fund also seeks to provide equity upside exposure to the Nasdaq-100 index. The fund generates distributable income from its disciplined options overlay strategy. It writes (shorts) out-of-the-money (above the market price) call options on the Nasdaq-100 index. As a result, the fund gets paid the options premium (value of the option), which provides it with income to distribute to investors. That income stream has been very lucrative over the past year: In addition to options premium income, the fund also offers equity exposure to the Nasdaq-100 index. However, instead of passively tracking that index, the fund's managers use an applied data science approach to fundamental research to construct a portfolio based on stocks in that index. This strategy can help the fund outperform that index. This ETF provides me with a lucrative monthly income stream (though it does fluctuate) and high price appreciation potential. The Vanguard Total Bond Market ETF provides fairly broad exposure to the bond market. It holds investment-grade bonds issued by the U.S. government and dollar-denominated bonds issued by corporations and foreign governments. The fund doesn't invest in inflation-protected, tax-exempt, or junk bonds. This investment strategy enables the ETF to provide investors with a relatively stable fixed-income stream. The majority of its holdings are U.S. government bonds (68.5%), while the remainder are AAA- (3.3%), AA- (3.2%), A- (11.9%), and BBB- (13.1%) rated bonds. Its government bond holdings include U.S. Treasuries and bonds issued by other government agencies, like the Federal Home Loan Mortgage Corporation, known as Freddie Mac. The fund's more than 11,375 bonds have an average yield to maturity of 4.6% and average effective maturity of 8.2 years. The fund distributes interest income monthly and has a current yield of 4.4%. This ETF helps diversify my portfolio by adding exposure to the bond market, which helps reduce risk while also providing me with some passive income. I've found that investing in ETFs can be a great way to bolster my passive income. These three funds, in particular, generate income from different sources, which helps diversify my income portfolio. That helps reduce risk, increasing the likelihood that I'll eventually reach my goal of becoming financially independent through passive income. Before you buy stock in Schwab U.S. Dividend Equity ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Schwab U.S. Dividend Equity 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 $611,271!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $684,068!* Now, it's worth noting Stock Advisor's total average return is 889% — a market-crushing outperformance compared to 162% 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 April 28, 2025 Matt DiLallo has positions in JPMorgan Nasdaq Equity Premium Income ETF, Schwab U.S. Dividend Equity 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. 3 Top ETFs I Plan to Buy in May for Passive Income was originally published by The Motley Fool Sign in to access your portfolio
