Vanguard Long-Term Corporate Bond ETF
You’ll find that the principal appreciation from falling rates at the long end (IEF)(VCLT) may make up for a large part of the shortfall in yields at the short end (SJNK).
Portfolio positioning will depend on your interest rate outlook. So it’s important to keep track of where rates are headed. As we mentioned earlier, this is an active strategy that requires periodic monitoring and reinvestment.
There’s an obvious benefit to investing in long-term tenors. Long-term (IEF)(VCLT) maturities typically yield more than shorter-term (SHY) maturities.
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The standard deviation of fund returns and the Sharpe ratio provide assessments of the risks taken by the fund to earn the returns.
In this part of the series, we will discuss and compare funds investing primarily in debt issued by domestic and overseas corporates.
Correlation coefficients measure the degree to which two variables move together without implying a causal relationship between them.
Long-duration ETFs have longer durations, as they’re mainly composed of securities with long-term maturity dates.