LQD - VCLT: High Quality And Worth A Look
2024-03-27 10:34:47 ET
Summary
- Bonds are at a tricky juncture with inflation and the Fed's rate cuts. Bullish on duration, but bearish on junk credit.
- The Vanguard Long-Term Corporate Bond Index Fund ETF Shares offers exposure to the long-term, investment-grade U.S. corporate bond market.
- The VCLT ETF holds a diversified portfolio of over 2,800 individual holdings, with top holdings including Anheuser-Busch, CVS Health, and Goldman Sachs.
Bonds are at a tricky juncture here in my view. Inflation is at risk of reaccelerating, while the Fed seems intent on lowering rates. Duration as the reason for a bond market selloff over the past three years likely is over, but credit risk is just about to kick in with credit spreads near cycle lows in my opinion. How do you play a bond market that has different factors at extremes now? I'd argue you want to be bullish duration, but bearish junk credit. That's why Vanguard Long-Term Corporate Bond Index Fund ETF Shares ( VCLT ) becomes potentially a good fund to allocate to....
VCLT: High Quality And Worth A Look