The Vanguard Total Bond Market ETF (BND) currently offers a higher yield than the Vanguard Short-Term Bond ETF (BSV), attracting income-focused investors. However, BND carries significantly more rate risk due to its longer duration and exposure to mortgage-backed securities, which can limit price gains and amplify losses. While BND may suit long-term investors willing to accept this risk for higher income, BSV remains safer with less sensitivity to interest rate changes. Investors should weigh whether the modest extra yield justifies the increased risk, especially given ongoing economic uncertainties and federal borrowing pressures.
Many people stick with the default target-date fund chosen by their employer for their 401(k), which may not be optimized for their age or cost-effective. Instead, a portfolio of three ETFs—Vanguard Total Stock Market ETF (VTI), iShares Core Dividend...
The Vanguard Total Bond Market ETF (BND) charges a minimal 0.03% fee, but investors holding it in taxable accounts face significant tax costs. Its roughly 4% yield is taxed as ordinary income, not at the lower rates for dividends or capital gains, re...
