Over 30 million investors have registered with Vanguard to accomplish their financial goals. Whether you’re saving to buy a new home, secure your retirement or invest for your higher education, Vanguard has the right set of financial products to help you realize your dreams.
Take a look at how investing in Vanguard bond funds can build your wealth in the long run.
What are Bond Funds?
Bond funds are companies that invest heavily in bonds or other types of debt securities. These bond funds can include mutual funds, exchange-traded funds (ETFs), closed-end funds or unit investment trusts.
There are various factors that can impact your earnings from the bond funds such as its risk, return, duration and volatility. Based on the investment goals and policies, a bond fund may increase its investments in a particular type of bond or debt security. These bonds can include government bonds, municipal bonds, corporate bonds, mortgage-backed securities and zero-coupon bonds.
Best Vanguard Bond Funds Right Now
The low expense ratios coupled with its wide range of investment options make Vanguard bond funds a hot pick for investors. You can consider investing in these bond funds from Vanguard to grow your wealth.
1. Extended Duration Treasury ETF (NYSEARCA: EDV)
The Vanguard Ext Duration Treasury ETF has been on the market since 2007. It offers exposure to long-dated U.S. treasury bonds. The ETF tracks the Barclays Capital U.S. Treasury STRIPS with maturities ranging from 20 to 30 years.
EDV has an expense ratio of 0.7% and a dividend yield of 2.24%. The 52-week range is $121.99 to $177.71 and its average daily volume is 255,816 shares. EDV has $1.02 billion in assets under management (AUM) with a 1-year return of -8.98%, a 3-year return of 10.80% and a 5-year return of 5.05%.
2. Long-Term Treasury ETF (NASDAQ: VGLT)
The Vanguard Long-Term Treasury ETF has been listed on the market since 2009. It offers exposure to long-term U.S. government bonds. This ETF tracks the Barclays U.S. Long Government Index and focuses on U.S. treasuries that mature in 10 years or more.
This ETF has an expense ratio of 0.05% and has an annual dividend yield of $1.83 per share. It has AUM of $2.5 billion. The Vanguard Long-Term Treasury ETF has high liquidity with an average daily trade volume of 361,161 shares. It has a 1-year return rate of 19.16%, a 3-year return rate of 34.87% and a 5-year return rate of 46.46%. This ETF has a 52-week high of $108.47 and a 52-week low of $80.97.
3. Long-Term Bond ETF (NYSEARCA: BLV)
The Vanguard Long-Term Bond ETF has been open to investors since 2007. It offers exposure to all types of bonds with a maturity of 10 years or more. This ETF tracks the Barclays U.S. Long Government/Credit Index.
This ETF has an expense ratio of $0.07% and has an annual dividend yield of $3.45 per share. It has an AUM of $5.4 billion. The Vanguard Long-Term Bond ETF has high liquidity and trades over 242,895 shares per day. It has a 1-year return rate of 16.19%, a 3-year return rate of 31.72% and a 5-year return rate of 51.27%. This fund has a 52-week high of $117.13 and a 52-week low of $88.93.
4. Long-Term Corporate Bond ETF (NASDAQ: VCLT)
The Vanguard Long-Term Corporate Bond ETF has been listed on the market since 2009. It offers exposure to investment-grade corporate bonds in the U.S. This ETF tracks the Barclays U.S. Corporate Index and focuses on bonds with a maturity of 10 years or more.
This ETF has an expense ratio of 0.05%. It has a 52-week high of $112.41 and a 52-week low of $76.45. The Vanguard Long-Term Corporate Bond ETF has an AUM of $5.5 billion. It has high liquidity and has an average daily trade volume of 241,133 shares. This ETF has a 1-year return rate of 13.54%, a 3-year return rate of 28.90% and a 5-year return rate of 54.80%.
5. Mega Cap Growth ETF (NYSEARCA: MGK)
The Vanguard Mega Cap Growth ETF has been open to trade since 2007. It offers exposure to mega-cap companies within the growth sector of the U.S. economy. This ETF tracks the MSCI U.S. Large Cap Growth Index.
The expense ratio of this ETF is 0.07% and has an annual dividend yield of $1.23 per share. It has a 52-week high of $201.18 and a 52-week low of $107.97. The Vanguard Mega Cap Growth ETF has high liquidity and trades more than 260,623 shares per day. It has an AUM of $9.6 billion and has a 1-year return rate of 43.38%, a 3-return rate of 85.19% and a 5-year return rate of 139.55%.
Best Online Brokers for Bond Funds
Bond funds trade similar to stocks and can be bought and sold on major stock exchanges like the NYSE and NASDAQ. The low cost and high trade volume of bond funds can be alluring to new investors and seasoned traders.
Investors gain instant diversification of their portfolio by investing in bond funds. Depending on the type of bond fund you choose to invest in, you can get exposure to multi-class companies in a single trade.
Benzinga has handpicked these top online brokers to get you started.
Advantages of Investing in Bond Funds
There are several benefits of investing your money in bond funds. These advantages include:
- Bond funds are professionally managed by investment managers. Investors won’t need to monitor the day-to-day market volatility of their investments.
- Many bond funds are tied to government and corporate entities for long-term periods. The duration of these bond funds can last between 10 to 30 years or more. The extended time on the bond maturity makes it less risky for long-term investors.
- Most bond funds pay their investors regular dividends. These dividends can be distributed to investors monthly, quarterly or annually.
- Bond funds can have holdings in several companies. The diverse range of assets underlying the bond funds can protect investors from losses caused by rapid market swings.
- Shares of bond funds are traded in vast amounts every day on the market. You can buy and sell shares of bond funds commission-free on most online brokers.
Vanguard Bond Funds Provide Dividends and Diversification
Vanguard is among the largest investment companies in the world. It offers a broad selection of low-cost bond funds, mutual funds and ETFs. Vanguard has over $6.2 trillion in global AUM and provides more than 190 U.S. funds as well as 230 additional funds outside the U.S.
Traders seeking to capture a larger share of the market can consider Vanguard bond funds to diversify their stock portfolios. You can also earn regular rewards through consistent dividends by investing in Vanguard bond funds.
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