Related – Don’t Sit Idle in Cash: Consider Investment-Grade Corporate Bond ETFs
In the current rising rate environment, a number of financial advisors are suggesting investors to treat fixed income like the sun and limit prolonged exposure. In this case, as the Federal Reserve’s predilection for raising interest rates does not appear to be changing anytime soon, it’s best to take advantage of these short-term rate adjustments by limiting duration.
VCIT, which holds over 1,700 bonds, has an average duration of 6.3 years. Duration measures a bond’s sensitivity to changes in interest rates. The fund’s credit risk is minimal as 92.5% of its holdings are rated A or Baa.
For more information on corporate debt, visit our corporate bonds category.