Vanguard Long-Term Corporate Bond Fund (VCLT)
VCLT: In The Way Of Hormuz
The Vanguard Long-Term Corporate Bond ETF faces heightened risk from prolonged geopolitical conflict and inflation expectations anchoring above the Fed's comfort zone. VCLT's long duration and average 22-year maturities make it highly sensitive to yield curve shifts, Fed rate trajectory, and credit spread movements. Current BBB credit spreads are historically tight despite looming risks from higher energy prices and potential earnings pressure on corporates.
Buy This ETF for 40% Upside Potential and a 5.7% Monthly Yield
Before the Federal Reserve began its aggressive rate-hiking cycle in 2022, Vanguard Long-Term Corporate Bond Index Fund ETF Shares (NASDAQ:VCLT) traded above $105 per share.
The 3 Vanguard ETFs With The Highest Dividend Yields
Vanguard is a favorite for many investors, thanks to its wide portfolio of index funds with very low expenses.
How To Do Better Than 5.5% Yielding VCLT
VCLT offers broad exposure to long-term investment-grade corporate bonds with a 0.03% expense ratio and a 5.5% yield to maturity. VCLT's performance closely tracks its benchmark, making outperformance unlikely due to its diversified 2,400-bond portfolio and minimal fees. Selective bond picking, such as GL.PR.D from Globe Life can deliver higher yields - 6.7% YTM for BBB+ credit - than VCLT's average.
VCLT: Carry, Duration, And Spreads
Vanguard Long-Term Corporate Bond Index Fund ETF Shares offers diversified exposure to long-term U.S. corporate bonds, tracking its benchmark passively. VCLT's returns depend on monthly bond coupons and price changes driven by interest rate and credit spread movements. Current macroeconomic indicators suggest a neutral environment for VCLT, with stable long-term rates and reasonable credit spreads.
VCLT: Might Be Too Early For A Rotation Into Long-Term Issuances
VCLT offers diversified, investment-grade, long-term corporate bond exposure with a 5.7% yield but carries significant duration risk due to rate sensitivity. Despite low fees and high liquidity, the Fund has underperformed peer ETFs on a total return basis, making it a less optimal choice. Current inflation trends and delayed Fed rate cuts increase the risk of adverse returns for long-dated bonds like those held in Vanguard Long-Term Corporate Bond Index Fund ETF Shares.
VCLT: High Yield And Rate Sensitivity
VCLT tracks the Bloomberg U.S. 10+ Year Corporate Bond Index, managing $15.29B with a low expense ratio of 0.04% and high rate sensitivity. The fund's performance seems to have been influenced by various economic conditions and Fed policies, with significant losses in 2018 and 2022, probably due to rate hikes. Stabilizing economic conditions and potential rate cuts could improve industrial credit quality, making VCLT an attractive option.
VCLT: Not Suitable For Short-Term Investing Now But Still Okay For Long-Term Investors
VCLT has performed well since October 2023, with a 13.2% total return and a 5.8% 30-day SEC yield. Inflation has improved but is still above the Federal Reserve's target. While U.S. treasury funds may be the better choice for short-term investors, long-term income investors should continue to own VCLT.
National Bank of Canada FI Sells 1,500 Shares of Vanguard Long-Term Corporate Bond ETF (NASDAQ:VCLT)
National Bank of Canada FI decreased its position in Vanguard Long-Term Corporate Bond ETF (NASDAQ:VCLT – Free Report) by 77.1% during the 4th quarter, according to the company in its most recent filing with the SEC. The fund owned 445 shares of the exchange traded fund’s stock after selling 1,500 shares during the quarter. National Bank of Canada FI’s holdings in Vanguard Long-Term Corporate Bond ETF were worth $35,000 at the end of the most recent reporting period. A number of other hedge funds have also made changes to their positions in VCLT. Evolution Advisers Inc. bought a new stake in Vanguard Long-Term Corporate Bond ETF during the fourth quarter worth about $26,000. Cullen Frost Bankers Inc. acquired a new stake in Vanguard Long-Term Corporate Bond ETF during the 3rd quarter valued at $31,000. Tennessee Valley Asset Management Partners acquired a new stake in Vanguard Long-Term Corporate Bond ETF during the 4th quarter valued at $36,000. Fifth Third Bancorp raised its position in Vanguard Long-Term Corporate Bond ETF by 29.5% in the 3rd quarter. Fifth Third Bancorp now owns 738 shares of the exchange traded fund’s stock valued at $53,000 after purchasing an additional 168 shares during the last quarter. Finally, Capital Investment Advisory Services LLC acquired a new position in Vanguard Long-Term Corporate Bond ETF in the fourth quarter worth $64,000. Vanguard Long-Term Corporate Bond ETF Stock Performance Shares of NASDAQ:VCLT opened at $76.28 on Monday. The business has a fifty day moving average of $76.01 and a 200-day moving average of $76.71. Vanguard Long-Term Corporate Bond ETF has a twelve month low of $67.47 and a twelve month high of $81.11. Vanguard Long-Term Corporate Bond ETF Increases Dividend The business also recently disclosed a dividend, which was paid on Monday, May 6th. Shareholders of record on Thursday, May 2nd were given a $0.323 dividend. The ex-dividend date was Wednesday, May 1st. This is a boost from Vanguard Long-Term Corporate Bond ETF’s previous dividend of $0.32. About Vanguard Long-Term Corporate Bond ETF (Free Report) Vanguard Long Term Corporate Bond ETF (the Fund) seeks to track the performance of a market-weighted corporate bond index with a long-term, dollar-weighted average maturity. The Fund employs a passive management or indexing investment approach designed to track the performance of the Barclays Capital U.S.
