Search results
Mar 13, 2024 · By 2024, Vanguard's offerings in the bond space have expanded to include 114 options, encompassing both mutual funds and exchange-traded funds, or ETFs, most of which boast low fees and...
Apr 3, 2024 · Here are seven of the best Vanguard funds to buy and hold in 2024: Featured Brokers. 1. Interactive Brokers. Low commission rates start at $0 for U.S. listed stocks & ETFs*. Margin loan...
People also ask
Should you invest in Vanguard index mutual funds & ETFs?
Are Vanguard ETFs a good investment in 2024?
Is Vanguard's total bond ETF (BND) still a good investment?
How many bonds are in a vanguard ETF?
- Introduction
- Bnd Review – Fund Composition
- Bnd Review – Analysis
- Bnd Review – Performance
- Bnd vs. Other Funds
- Conclusion
In this BND review, I will take a closer look at Vanguard’s most renowned bond ETF. We will look at the fund’s composition in terms of credit quality and fixed income maturity and also go over some key facts and figures. In the second half of this review, we’ll focus more on BND’s performance and analyze some potential risks as well.
Within the following section, we will look at BND’s composition. What’s the distribution of credit quality in the fund and how long until most of its holdings mature?
Volatility
BND has 3.71 percent annual volatility(1.07 percent monthly). Bond fund volatility tends to be far less than the corresponding total stock market funds at all times. This makes sense since these fixed-income holdings are meant to stabilize portfolio growth or smooth the transition to retirement where there is little use for huge swings in portfolio value.
Drawdown
Over the years, BND experiences drawdowns of up to -4.0 percent. Major drawbacks occurred in 2008/2009, when the financial crisis hit the banks of the world and the U.S. in particular, again in 2013/2014 and the latest in 2017. The current stock market drawdown (2020) isn’t much reflected in either fund. Certainly the statements about volatility and maximum drawdown are only true for the time period examined above. It would be foolish to say either the negative levels will never be higher or...
Of course, performance and overall returns are the key indicators of every investor’s successin a fund. Since we’ve discussed many of the key composition facts above, now it’s going to be easier to see how these impact returns. The following is a $10,000 dollar backtest invested in BND early in 2008. The annual returns are:
BND vs. TLT
TLT’s compound annual growth rate ( CAGR) of 7.87 percent is significantly higher than BND’s at just 4.19 percent in terms of performance. However, TLT is also much more volatile than BND at 3.72 percent with an annual volatility of 14.18 percent. This also leads TLT to experience much higher maximum drawdowns than BND. While examining the differences between BND and TLT, it is important to bear in mind that the two funds have different objectives. And each of them fulfills its goal in specif...
BND vs. BNDX
Overall, with a compound annual growth rate ( CAGR) of 4.57% vs. 4.16%, BNDX performs better than BND. Also, BNDX is less volatile than BND, and has lower drawdowns. Only U.S. bonds with mostly high credit ratings make up BND. BNDX consists of international bonds with different credit ratings, from AAA to BBB. Both provide their target bond markets with excellent exposure, at very low fees. BND holds far higher rated bonds than BNDX in terms of the credit rating. In contrast, BNDX also yields...
BND vs. BIV
BND comprises U.S. bonds with maturities ranging from 1-30 + years. On the other hand, only between 3-15 years BIV is made up of bonds with maturities. Overall, with a compound annual growth rate ( CAGR) of 5.31 percent vs. 4.19 percent, BIV performs better than BND. But BIV is also more volatile than BND, as well as experiencing higher drawdowns. BND and BIV provide excellent visibility to their target bond markets, at very low fees. As for credit rating, BND holds higher-rated bonds than BI...
Vanguard’s Total Bond ETF (BND) is still among the best in the industry. While other funds have come and gone and some have yielded higher returns than BND, none have achieved the same level of diversification through thousands of holdings. And true full exposure to the entire U.S. bond market does not have to be pricey: just recently Vanguard redu...
- 0.035%
- Vanguard Total Bond Market ETF
- Vanguard
Jan 19, 2024 · Portfolio Basics: How to Build an Investment Portfolio. Best Vanguard Index Funds to Buy: Stocks. These Vanguard index mutual funds and ETFs investing in stocks have at least one...
- Look for a firm that understands the bond market. Bonds are, as Vanguard writes, an “opaque market.” One of the biggest recent financial developments has been the rise of individual, or “retail,” investors.
- Understand the difference between index replication and index sampling. Both stock and bond ETFs are often built around an index, meaning an external benchmark that the fund will try to replicate.
- Stock and bond ETFs are assessed differently. Every traded asset has what’s known as the bid-ask spread. This is the difference between the asset’s bid price (the price that buyers will pay) and its ask price (the price a seller will accept).
- Pay attention to the fund’s return structure. A fixed-income ETF can generate two main forms of return. Most of your return will come from interest payments issued by the fund’s underlying bonds.
Each of these ETFs includes a wide variety of bonds in a single, diversified investment. Vanguard Total Bond Market ETF holds more than 8,300 domestic investment-grade bonds. Vanguard Total International Bond ETF holds more than 4,500 bonds from both developed and emerging non-U.S. markets.
Apr 15, 2024 · 5.33. 0.25. Fallen-angel funds have lower SEC yields than do other high-yield index funds, as befits their somewhat stronger credit quality. They also have posted better five-year returns. However ...
