|Bid||86.42 x 1100|
|Ask||86.67 x 3200|
|Day's Range||86.46 - 86.58|
|52 Week Range||81.95 - 87.09|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||1.17|
|Expense Ratio (net)||0.07%|
Now that the Federal Reserve is moderating its monetary policy, and the yield curve has turned negative for the first time since 2007, the best bond funds to buy are also beginning to shift.As recently as the third quarter of 2018, it appeared as if the Fed would hike interest rates two or three times in 2019. By the beginning of 2019, the Fed's tone and outlook began to signal that one or two interest rate bumps during the year were the best bet. As of a few days ago, the Fed indicated it may not raise rates at all in 2019 but may possibly hike rates just once in 2020.What this means for bonds is that yields will moderate along with the Fed's policy. Moderating yields will in turn provide support, or even a lift, to bond prices. Translation: Now may be a good time to increase your exposure to bond funds.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Reasons to Buy Housing Stocks in 2019 With that backdrop in mind, here are the best bond funds to buy for a shifting interest rate environment: Best Bond Funds to Buy: iShares Core U.S. Aggregate Bond (AGG)Expenses: 0.05%, or $5 for every $10,000 investedSmart investors know, especially after the past year, that the interest rate environment is difficult to predict. This uncertainty makes a broadly diversified bond fund like iShares Core U.S. Aggregate Bond (NYSEARCA:AGG) a wise choice.AGG tracks the Bloomberg Barclays U.S. Aggregate Bond index, which covers the entire U.S. bond market of more than 7,000 bonds. Although the portfolio has a broad range of maturities and credit quality, the average weighted maturity is just under eight years and the average ratings are investment grade.This means that investors can reap the benefits of reduced market risk through diversification but also the potential price gains coming for a moderating rate environment. Vanguard Intermediate-Term Corporate Bond (VCIT)Source: Shutterstock Expenses: 0.07%As bonds come back into favor, corporate bonds typically outperform Treasury bonds and municipal bonds. This makes Vanguard Intermediate-Term Corporate Bond (NYSE:VCIT) a smart choice now.Treasury bonds and municipal bonds typically have lower yields than corporate bonds. They also generally have lower annualized returns, especially when investing for longer than one year. * 7 Marijuana Stocks to Play the CBD Trend Unless you are investing in a taxable brokerage account and need tax-free income, a low-cost corporate bond fund like VCIT is a great fund to hold now and in the long run. SPDR Nuveen Barclays Municipal Bond Index (TFI)Expenses: 0.23%Investors needing tax-free income at the Federal level should consider a low-cost, diversified bond fund like SPDR Nuveen Barclays Municipal Bond Index (NYSE:TFI).If you want to increase your exposure to bond funds to take advantage of moderating or falling interest rates, you'll need to be cautious about the tax implications. If you're investing in a taxable account and your top Federal tax rate is 32% or higher, a municipal bond fund like TFI can be a smart idea.Although municipal bonds typically have lower yields than corporate bonds, the tax-equivalent yield of municipal bonds (the yield a taxable fund would need in order to equal the tax-free yield of a municipal bond fund) can make sense.The SEC yield for TFI is a solid 2.1% and the tax-equivalent yield is 3.5%. PIMCO 25+ Year Zero Coupon U.S. Treasury Index (ZROZ)Expenses: 0.15%If you're not afraid of taking extra risk, a highly interest-rate-sensitive bond fund like PIMCO 25+ Year Zero Coupon U.S. Treasury Index (NYSEARCA:ZROZ) may be your best bet for out-sized returns.When interest rates are flattening and expected to fall, the bonds and bond funds with the greatest interest rate sensitivity typically see the biggest price gains. Bonds with long maturities will see bigger price gains than those with shorter maturities. Also zero-coupon bonds have greater interest rate sensitivity because they pay the investor zero interest until maturity. * 7 Beaten-Up Stocks to Buy as They Reverse Course Enter ZROZ. This ETF holds long-term zero-coupon bonds and will likely see the biggest jumps in price, assuming the interest rates remain flat and begin to decline in 2020 (or sooner). Vanguard Total Bond Market Index Admiral Shares (VBTLX)Source: Shutterstock Expenses: 0.05% Minimum Investment: $3,000For a low-cost, diversified bond mutual fund, it's tough to beat Vanguard Total Bond Market Index Admiral Shares (MUTF:VBTLX).Vanguard recently closed most of their Investor Shares mutual funds and made their lower-cost Admiral Shares available to investors with the same $3,000 minimum initial investment. This makes many of their mutual funds as cheap as the cheapest ETFs on the market.To get broad exposure to bonds without taking on too much interest-rate risk, VBTLX is an outstanding choice. The portfolio tracks the Bloomberg Barclays U.S. Aggregate Bond index, which consists of over 7,000 bonds, providing exposure to the entire U.S. bond market. Vanguard Long-Term Bond Index (VBLTX)Source: Shutterstock Expenses: 0.15% Minimum Investment: $3,000The best low-cost long-term bond mutual fund is arguably Vanguard Long-Term Bond Index (MUTF:VBLTX).As the Fed puts a hold on rate hikes, and the potential increases for rate cuts, long-term bond funds like VBLTX can be a smart move. This is because long-term bonds tend to have greater price increases than short- and intermediate-term bonds as interest rates begin to fall. * 10 Stocks on the Rise Heading Into the Second Quarter VBLTX tracks the Bloomberg Barclays U.S. Long Government/Credit Float Adjusted Index, which consists of more than 2,000 U.S. long-term bonds. In addition to potential for greater gain potential, the 3.8% trailing-12-month yield may be attractive to investors looking for income. Loomis Sayles Bond Retail (LSBRX)Source: Shutterstock Expenses: 0.91%If you're looking for a well-managed go-anywhere bond fund to compliment your core bond funds, Loomis Sayles Bond Retail (MUTF:LSBRX) can be a fine choice.The bond market is arguably more complex and more difficult to forecast than the stock market. This makes a solid case for investing in either a passively managed index fund or an actively managed fund with an outstanding manager at the helm. Some investors may choose to have the best of both and use a total market index fund for a core holding and a fund like LSBRX as a compliment.Diversification is especially important in uncertain interest rate environments, as is the case in 2019.LSBRX is managed by Dan Fuss, who has been at the helm of the fund for nearly 30 years and has been managing fixed income portfolios for over 50 years. The LSBRX portfolio consists of a wide range of maturities and credit quality. About two-thirds of the bonds are U.S. and the other one-third is non-U.S. bonds.As of this writing, Kent Thune did not personally hold a position in any of the aforementioned securities, although he held AGG and VBTLX in some client accounts. Under no circumstances does this information represent a recommendation to buy or sell securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Tech Stocks With Key Products That Face an Uncertain Future * 7 SaaS Stocks to Buy for Long-Term Gains * 5 Semiconductor Stocks That Are Scorching Hot Buys Compare Brokers The post The 7 Best Bond Funds to Buy for a Shift in Interest Rates appeared first on InvestorPlace.
While the U.S. equities market experienced one of their best January start to a new year in decades, investors still pulled billions from U.S. stock-related ETFs. Investors redeemed $25 billion from U.S. ...
Yes, 2019 is still in its early stages, but for all the concerns about the state of the U.S. investment-grade corporate bond market heading into this year, that universe is off to a solid start. With expectations in place that the Federal Reserve will slow its pace of interest rate hikes or not boost borrowing costs at all this year, some fixed income investors may revisit longer-dated bonds. For those looking to increase duration exposure without going all the way to long-term bonds and the related exchange traded funds, intermediate-term bond funds are adequate substitutes.
Following a mid-2018 makeover that left it with a much lower fee and a new benchmark, there is more to like about iShares Intermediate-Term Corporate Bond ETF IGIB than ever before. Since Aug. 1, 2018, the fund has tracked the ICE BofAML 5-10 Year U.S. Corporate Index. The index is a gauge of the performance of U.S.-dollar-denominated investment-grade corporate bonds that have maturities ranging from five to 10 years.
As the capital markets were in the thick of the extended bull run that peaked in the summer prior to the October sell-offs, high-yield assets saw an influx of investor capital, beating out their higher-rated rivals in investment-grade corporate bonds. After investors got washed through the October volatility cycle, that may have tamped down their risk-on sentiment and this is where Goldman Sachs sees a potential buying opportunity after investment-grade debt fell out of favor during the bull run. With investors hungry for risk, the yields in investment-grade corporate bonds weren't enough to satiate that appetite.
The Institute for Supply Management released a report on Thursday that revealed a growth increase in U.S. service sector activity--a pace that was higher than expected in the month of August. "There was a strong rebound for the non-manufacturing sector in August after growth 'cooled off' in July," said Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee.
Figuring out how to start a retirement fund can be a daunting task for any investor, but that is especially true for younger, novice investors that are nowhere near retirement age. Investors wondering how to start a retirement fund do not need to scramble for ideas and vehicles to immediately start retirement planning. Easy-to-access instruments include 401k plans (for some workers) and individual retirement accounts (IRAs).
This year has been a challenging one for fixed income investors as the Federal Reserve has increased interest rates twice. Bond markets are pricing in two more rate hikes by the end of the year, with one expected in at the Fed's September meeting. With borrowing costs climbing, many fixed income investors are gravitating to short-term bonds and the related exchange-traded funds (ETFs).
Come September, emerging markets will be watching the Federal Reserve closely with respect to monetary policy or even more specifically, what the central bank decides to do with interest rates. A rising dollar could mean financial instability for emerging market nations trying to pay outstanding U.S. debt obligations with local currencies. Rising interest rates may also discourage foreign investment into emerging market nations in favor of assets based in the U.S.
VCIT, one of the largest intermediate-term corporate bond exchange trade funds, is also one of the least expensive funds in this category. “This fund is one of the lowest-cost options in the corporate-bond Morningstar Category, and it has a strong index-tracking record. VCIT, which holds over 1,700 bonds, has an average duration of 6.3 years.
While savvy investors with vast resources certainly have better chances of catching winners, bond investing can be a daunting task for everyday investors. Luckily, it's easy to follow the market's collective wisdom with a low-cost portfolio like Vanguard Intermediate-Term Corporate Bond ETF VCIT . This fund earns a Morningstar Analyst Rating of Silver because it effectively tracks a well-constructed benchmark and enjoys a sizable cost advantage over most of its peers.
In the current interest rate environment, many fixed income investors are flocking to short-term bond funds while eschewing long-date fare. Sometimes, the middle part of the curve is appropriate to consider ...
While the Turkish lira has been languishing amid geopolitical tensions with the United States, U.S. corporate bond-focused fixed-income ETFs edged higher, such as the iShares Intermediate Credit Bond ETF (CIU)--up 0.16%, iShares iBoxx $ Invmt Grade Corp Bd ETF (LQD)--up 0.13% and Vanguard Interm-Term Corp Bd ETF (VCIT) --up 0.20%. CIU tracks the investment results of the Bloomberg Barclays U.S. Intermediate Credit Bond Index. CIU focuses on investment-grade corporate debt and sovereign, supranational, local authority and non-U.S. agency bonds that are U.S. dollar-denominated and have a remaining maturity of greater than one year and less than or equal to ten years.
The benchmark 10-year and 30-year Treasury yields fell Friday, slipping to 2.956 and 3.098 respectively as the U.S. Department of Labor reported today that total nonfarm payrolls increased by 157,000 for ...
The Federal Open Market Committee is in the midst of a two-day meeting to discuss their next moves on monetary policy, which will include a policy decision announcement set to take place on Wednesday. ...
The Vanguard Intermediate-Term Corporate Bond ETF (NYSEArca: VCIT) is one exchange traded fund that can help investors boost income on bond investments without taking on significantly higher risk. VCIT, ...
The latest news regarding new home sales falling to an eight-month low in June spilled over into the government debt space as the benchmark Treasury yields ticked lower on Wednesday. The yield on the benchmark ...
In ETF Trends’ Part 1 of looking at the best fixed-income ETFs to have during a recession, four ETFs were introduced that underscored the need to have shorter terms if possible and investment-grade holdings ...
Strategic-beta (often called "smart beta") fixed-income funds attempt to offer the best of active and passive management: benchmark-beating performance with transparent portfolio construction rules and low fees.
Vanguard, the second-largest U.S. issuer of exchange traded funds, said it has filed plans with the Securities and Exchange Commission to introduce the Vanguard Total World Bond ETF. Vanguard previously used the ETF of ETFs on one of its other bond ETFs. The Vanguard Total Corporate Bond ETF (VTC) debuted last year and holds the Vanguard Short-Term Corporate Bond ETF (VCSH) , Vanguard Intermediate-Term Corporate Bond ETF (VCIT) and Vanguard Long-Term Corporate Bond ETF (VCLT) .