ETF Trends
ETF Trends

ETF spotlight on Vanguard Short Term Bond (NYSEArca: BSV), part of an ongoing series.

Assets: $7.37 billion.

Objective: The Vanguard Short-Term Bond fund tries to track the performance of a a market-weighted bond index that covers investment-grade bonds with a dollar-weighted average maturity of 1 to 5 years.

Holdings: Invests in U.S. government, investment-grade corporate, and investment-grade international dollar-denominated bonds.

What You Should Know:

  • Vanguard is the provider of the fund.
  • BSV has an expense ratio of 0.11%.
  • The fund has a 12-month yield of 2.02%.
  • The ETF is down 0.10% over the past month, up 0.90% over the last three months and up 2.68% year-to-date.
  • The ETF is “especially suitable for investors who want broad investment-grade exposure to government, government agency, and corporate bonds without having to also take on the risk of securitized bonds,” Timothy Strauts, Morningstar analyst, says.
  • Investors should be aware of the potential interest-rate and inflation risks associated with bond funds.
  • “The fund’s low duration will help insulate it from rising interest rates. The bigger concern for investors is that if interest rates stay at the current low levels for an extended period of time, there isn’t opportunity for much return,” Strauts added.

The Latest News:

  • After the recent round of seven-year debt sales, short-term Treasury prices were depressed to session lows Thursday, reported Karen Brettell for Reuters.
  • The Fed will trade $400 billion in short-term securities for long-term holdings as a way to help boost the economy. [Operation Twist]
  • Vanguard Short Term Bond and iShares Barclays Short Treasury Bond (NYSEArca: SHV) have seen notable inflow activity and share creations recently. [ETF Chart of the Day]

For past stories in this series, visit our ETF Spotlight category.

Vanguard Short Term Bond

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.