VCSH Stock Recent News

Fixed income investors looking for the dual benefit of price appreciation and high yields need not look any further than corporate bonds ETFs. Three offerings from Vanguard can suit investors as stand-alone exposure or for bond laddering purposes.

Extracting yield in the current market environment is a prime option for getting bond exposure. However, the risk associated with depreciating prices shouldn't put off prospective fixed income investors.

As the capital markets brace for potential rate cuts before the end of the new year, investor demand is building for corporate bonds, leading businesses to issue more debt from investment-grade to high yield.

As a Wall Street Journal report noted, corporate profits are on the rise after a majority of companies have reported their first-quarter earnings. In turn, this could bring more fixed income investors to corporate bonds if the profit outlook remains rosy.

The higher-for-longer interest rate narrative continues to play out as the U.S. Federal Reserve opted to once again keep rates unchanged. Rather than wait for interest rate cuts, some companies are opting to simply offload debt, which could be a boon for corporate bonds.

Vanguard Short-Term Corporate Bond Index Fund ETF Shares is a low-risk investment option for conservative investors seeking income and stability. The VCSH ETF primarily invests in high-quality investment-grade corporate bonds with short-term maturity of 1 to 5 years. The fund offers a low expense ratio, a diversified portfolio, and minimal credit risk, making it an attractive option in the bond market.

Even if higher-for-longer interest rates are applying downward pressure on bond prices — and conversely, upward pressure on yields — bonds still look enticing. Vanguard has a few bond-focused exchange-traded funds (ETFs) that are worth considering.

The demand for corporate bonds is extending beyond the need for yield. As credit quality conditions improve for corporate bonds, they also offer credit risk mitigation in tandem with higher yield versus safe haven government debt.

The risk-on sentiment in equities could also be permeating into bonds. According to Reuters, more investors are willing to take on credit risk to attain yield, but there are other exchange-traded fund (ETF) options to consider.

With the U.S. Federal Reserve recently standing pat on interest rate hikes, bets on rate cuts are dissipating as the data-dependent central bank seeks more confirmation before loosening monetary policy. In the meantime, it's helping to fuel spikes in short-term yields.