If you’re looking for yield, check out these Vanguard ETFs
Even with yields on safe-haven government debt like the benchmark 10-year Treasury note rising, fixed-income investors are demanding more from their portfolios, which Vanguard can deliver with three of its exchange-traded funds (ETFs).
Investors are not forced to accept only the riskiest debts in the bond markets. They can stick to the safe limits of treasury bills, but have to accept a longer term for more yield. This is possible with ETFs like Vanguard Extended Duration Treasury Index Fund ETF Shares (EDV).
EDV seeks to track the performance of a zero coupon, extended duration US Treasury index. The fund uses an index investment approach designed to track the performance of the Bloomberg US Treasury STRIPS 20-30 Year Equal Per Bond Index.
This index includes zero coupon US Treasury STRIPS securities, which are guaranteed by the full confidence and credit of the US government, with maturities ranging from 20 to 30 years. The fund invests by sampling the index. At least 80% of its assets will be invested in US Treasury securities held in the index.
Longer term options and emerging markets
Another ETF to consider that goes beyond Treasury bills is the Vanguard Long-Term Bond Index Fund ETF Shares (BLV). BLV seeks to track the performance of the Bloomberg US Long Government / Credit Float Adjusted Index. This index includes all medium and larger issues of publicly issued US government bonds, investment grade corporate and international dollar denominated bonds with maturities greater than 10 years.
As such, BLV can take advantage of a variety of options when it comes to bond investing. As mentioned, the common denominator is that the fund sticks to a higher duration with debt holdings exceeding a decade.
Finally, the return can be obtained through Emerging Market Bonds (EM) with the Vanguard Emerging Markets Government Bond Index Fund ETF Shares (VWOB). VWOB seeks to track the performance of a benchmark that measures the investment performance of US dollar denominated bonds issued by governments and government-linked issuers in emerging markets.
The fund uses an index investment approach designed to track the performance of the Bloomberg USD Emerging Markets Government RIC Capped Index. The fund comes with a low expense ratio of 0.28%.
For more news, information and strategy, visit the website Fixed income channel.