|Bid||88.52 x 4000|
|Ask||89.10 x 800|
|Day's Range||88.82 - 89.08|
|52 Week Range||81.95 - 89.08|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||1.12|
|Expense Ratio (net)||0.07%|
As a result, high yield has underperformed lately as investors flocked to the safer confines of quality oriented assets like investment-grade debt issues. "The market was clearly pricing in a good chance of a trade deal in May and that did not happen," said Todd Schomberg, senior portfolio manager for Invesco Fixed Income. "I wouldn't call it a full-blown flight to quality," said John Hollyer, principal and global head of Vanguard Fixed Income Group.
Depending on your stage of life or the asset allocation in your portfolio, bonds may be a solid choice to provide fixed-income stability and a hedge against more risky equity investments. Interest rates have been historically low for many years, making the gold standard, U.S. Treasuries, less attractive. Fortunately, there are a number of high-quality investment-grade corporate bond exchange-traded funds (ETFs) that are comparatively inexpensive and highly liquid.
According to the latest Morningstar Direct Fund Flows Commentary, taxable-bond funds saw an influx of $42.5 billion during the month of April, which represented the second-best month over the past three years and the best since January 2018. “The bulk of taxable-bond flows went to intermediate-term bond funds, but there was an interesting bifurcation in April as the old intermediate-term bond Morningstar Category was retired and two new related Morningstar Categories were introduced: intermediate core bond and intermediate core-plus bond,” the report noted. 1. iShares 20+ Year Treasure Bond ETF (TLT) - $1.87 billion: seeks to track the investment results of the ICE U.S. Treasury 20+ Year Bond Index (the "underlying index").
In the world of exchange-traded funds (ETFs), equity funds are the dominant group, but advisors and investors are increasingly willing to fill out the fixed income portions of their portfolios with bond ETFs. Last year, nearly bond ETFs set an inflows record, capturing nearly a third of all U.S. ETF inflows.Bond ETFs are on a torrid asset-gathering pace again in 2019. Year-to-date, five of the top 10 ETFs in terms of new assets added are bond ETFs and investors' pensiveness on the rise, bond ETFs could continue packing on new assets over the coming months.Adding to the case for bond ETFs, particularly those with long durations, is that the Federal Reserve appears likely to hold off on raising interest rates this year. Some bond market observers are even speculating that an interest rate cut could occur later this year. While it may be prudent to expect an interest rate cut, even if the Fed simply stands pat on rates, that could benefit a slew of bond ETFs.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Dividend Stocks to Buy as the Trade War Reignites For investors looking for safety plays or to boost their income streams, here are some bond ETFs to consider. Bond ETFs: WisdomTree Yield Enhanced U.S. Short-Term Aggregate Bond Fund (SHAG)Expense Ratio: 0.12% per year, or $12 on a $10,000 investment.The WisdomTree Yield Enhanced U.S. Short-Term Aggregate Bond Fund (CBOE:SHAG) is a bond ETF for investors to consider if, for some reason, the Fed surprisingly reverses course and decides to raise rates again because SHAG has an effective duration of just 2.65 years. Lower duration bond ETFs are less sensitive to changes in interest rates, explaining why so many of these bond ETFs were popular in 2018 when the Fed boosted borrowing costs four times.SHAG's 30-day SEC yield of 2.73% is decent when considering investors are not incurring much risk with this bond ETF. That yield is boosted by a 55.37% weight to corporate bonds, while the rest of SHAG's holdings are U.S. government and agency debt. That means credit risk is mostly low with this fund, as highlighted by more than 40% of SHAG's holdings carrying AAA ratings. None of SHAG's holdings carry junk ratings.While it appears unlikely interest rates will rise, SHAG still merits consideration over the near-term due to its conservative posture and steady income stream. SPDR ICE BofAML Broad High Yield Bond ETF (CJNK)Expense Ratio: 0.15%Cheap ETFs are available in all shapes and sizes and that includes junk bond funds. In fact, the SPDR ICE BofAML Broad High Yield Bond ETF (NYSEARCA:CJNK) was recently converted into one of the least expensive junk bond ETFs on the market after being a different kind of corporate bond fund. While many investors think of junk bonds as risky, this asset class is suitable for myriad portfolios and investment objectives."High yield is an asset class that should be at the center of any income-generating portfolio, just by virtue of it carrying a yield 63% higher than that of the combined yield of global aggregate bonds and global equities, on average, over the past 20 years," according to State Street research. * 7 Cloud Stocks to Buy on Overcast Days CJNK has an option-adjusted duration of 3.61 years and holds over 1,000 junk bonds. This low-cost bond ETF has a 30-day SEC yield of 6%. VanEck Vectors Green Bond ETF (GRNB)Expense Ratio: 0.3%For investors looking to implement socially responsible investing principles in the fixed income portions of their portfolios, the VanEck Vectors Green Bond ETF (NYSEARCA:GRNB) is a bond fund to consider. A simple definition of green bonds is that these bonds are issued to finance environmentally friendly projects.GRNB's underlying index "is comprised of labeled green bonds that are issued to finance environmentally friendly projects, and includes bonds issued by supranational, government, and corporate issuers globally in multiple currencies," according to VanEck.Many issuers of green bonds are large, developed market governments, meaning GRNB's credit risk is low. About two-thirds of the fund's 188 holdings are rated AAA, AA or A. GRNB has a duration of 6.45 years. The green bond market is expected to grow exponentially in the years ahead."The first quarter of 2019 saw a welcome boost in green bond supply, totaling over $40 billion, which is up approximately 46% versus the same period one year ago," said VanEck in a recent note. "North American issuance was up approximately 30%, with green bonds from first time corporate issuers including Verizon and Citigroup as well as repeat issuance from companies such as Duke Energy and MidAmerican Energy." Schwab Short-Term U.S. Treasury ETF (SCHO)Source: Shutterstock Expense Ratio: 0.06%The Schwab Short-Term U.S. Treasury ETF (NYSEARCA:SCHO) is a bond ETF for conservative, cost-conscious investors. As its name implies, SCHO holds Treasuries, so there is essentially no credit risk with this fund."Indexing Treasuries in this way is a sound approach for exposure to a specific portion of the yield curve," said Morningstar in a recent note on SCHO. "It is difficult for active managers to recoup their fees while offering comparable exposure to Treasuries on this narrow segment of the yield curve, as Treasuries are one of the most competitively priced areas of the bond market and managers have little leeway to take additional duration risk." * 7 Dangerous Dividend Stocks to Stay Far Away From SCHO's effective duration is just 1.93 years. In other words, SCHO's selling points are low credit risk, low rate risk and a low fee. The first two of those points also mean a somewhat low yield (2.32%), but that is the trade-off for reducing credit and interest rate risk. Vanguard Total International Bond ETF (BNDX)Source: Shutterstock Expense Ratio: 0.09%The Vanguard Total International Bond ETF (NASDAQ:BNDX) has several factors that make it a compelling choice among bond ETFs. As is the case with so many Vanguard funds, BNDX qualifies as a cheap ETF. In fact, investors would be hard-pressed to find a cheaper international bond ETF.Second, BNDX provides investors with some international diversification, a trait that often goes overlooked in bond portfolios. Third, BNDX uses a currency hedge to provide a buffer against weakness in currencies that the fund's holdings are denominated. Home to more than 5,600 bonds, BNDX is also one of the largest bond ETFs in terms of roster size.BNDX has slight emerging markets exposure and the bulk of its geographic exposure is allocated among developed Europe and the Asia-Pacific region. Japan, France and Germany combine for 43.2% of this Vanguard fund's weight. BNDX has an average duration of 7.9 years and is one of this year's most popular bond ETFs as highlighted by inflows of $3.43 billion, good for the ninth-best tally among U.S.-listed ETFs. Vanguard Intermediate-Term Corporate Bond ETF (VCIT)Source: Shutterstock Expense Ratio: 0.07%The Vanguard Intermediate-Term Corporate Bond ETF (NASDAQ:VCIT) is one of the dominant names among intermediate-term corporate bond ETFs. One of the lowest fees in the category is a help, as is the fund's investment-grade portfolio.VCIT holds 1,770 bonds with an average duration of 5.8 years. Over 94% of the fund's holdings are rated A or Baa. VCIT has a 30-day yield of 3.6%, which is above what investors find with Treasury funds of comparable durations. This Vanguard fund is outperforming the largest corporate bond ETF by about 40 basis points over the past 12 months. * 10 Great Stocks to Buy on Dips Advisors and investors are certainly taking notice. As of May 9, VCIT's year-to-date inflows were $4.39 billion, good for the top spot among bond ETFs and the fourth spot overall among U.S.-listed ETFs. Invesco Corporate Income Value ETF (IHYV)Source: Shutterstock Expense Ratio: 0.23%At just under a year old, the Invesco Corporate Income Value ETF (NYSEARCA:IHYV) is a hidden gem among corporate bond ETFs, presenting investors with a value play on corporate bonds with non-investment-grade ratings. This bond ETF tracks the Invesco High Yield Value Index.That benchmark is "designed to provide exposure to higher value, U.S. high yield bonds and bonds with the lowest credit rating considered investment grade," according to Invesco. "Higher value bonds are characterized as those with higher yields that may provide greater returns in certain markets. In addition, the Index seeks to incorporate securities with the highest quality scores within the eligible universe of U.S. bonds."IHYV features scant exposure to highly speculative CCC-rated debt (3% of the portfolio), but the fund is somewhat levered to oil prices because energy issues represent over 22% of IHYV's weight. Investors are compensated for the risk that comes along with this bond ETF with a 30-day SEC yield of 6.50%. IHYV has an effective duration of 4.04 years.As of this writing, Todd Shriber did not own any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Dividend Stocks to Buy as the Trade War Reignites * 10 Stocks That Could Squeeze Short Sellers, Including CGC * 5 Tech Stocks Getting Crushed Compare Brokers The post 7 Bond ETFs to Buy appeared first on InvestorPlace.
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, ...