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, one of the kings among intermediate-term corporate bond exchange trade funds, is also one of the least expensive funds in this category. This Vanguard fund charges just 0.07% per year, or $7 on a $10,000 investment, making it cheaper than 91% of competing funds, according to Vanguard data.

VCIT seeks to track the performance of a market-weighted corporate bond index with an intermediate-term dollar-weighted average maturity, namely the Bloomberg Barclays U.S. 5-10 Year Corporate Bond Index. While VCIT holds debt issues with maturities between 5 and 10 years, they are all investment-grade holdings to minimize default risk.

VCIT “provides market-cap-weighted exposure to investment-grade U.S. corporate bonds with between five and 10 years until maturity,” said Morningstar. “It is one of the lowest-cost options in the corporate-bond Morningstar Category and has tightly tracked the Bloomberg Barclays U.S. 5-10 Year Corporate Bond Index. While there’s plenty to like here, it’s important to note that this fund has heavy exposure to the financial-services sector, which could be a source of risk. It earns a Morningstar Analyst Rating of Silver.”

View On VCIT

Fixed-income ETF investors should look into the opportunities in the short-end of the yield curve to generate income while mitigating duration risk and consider ways to blend active and passive exposures to position portfolios in today’s bond market.

Related: Fixed-Income ETF Strategies for Rising Interest Rates

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