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SPIB - VCSH: How The Fed Is Increasing The Risk Of This Fund For Retail Investors
SPDR Portfolio Intermediate Term Corporate Bond
Investment Thesis
The Secondary Market Corporate Credit Facility has made the Fed one of the biggest players in the corporate bond ETF market. In the case of the Vanguard Short-Term Corporate Bond ETF (VCSH), the Fed now owns about 5% of the fund and has been responsible for more than 50% of its net flows over the past month.
That activity has increased the risk of buying VCSH shares for regular investors and could ultimately cost them in performance as well.
Background
The Vanguard Short-Term Corporate Bond ETF is the 5th largest bond ETF in