Vanguard VCLT vs. VGLT: Which Long-Term Bond ETF Deserves Your Portfolio?
Investors willing to embrace interest rate risk may enjoy the income benefits of the Vanguard Long-Term Corporate Bond ETF or the Vanguard Long-Term Treasury ETF.
Overview
In the fixed-income market, experienced and novice investors alike can benefit from a refresher. Here's a reminder: When investing in bonds, the two primary forms of risk to consider are credit and interest rate risk.
Even with mountains of debt, the U.S. carries some of the highest sovereign credit ratings in the world, so income investors considering exchange-traded funds (ETFs) such as the Vanguard Long-Term Treasury ETF (NASDAQ: VGLT) don't worry much about credit issues. But with long-term bonds, interest rates are paramount.
Details
When it comes to corporate bonds and funds such as the Vanguard Long-Term Corporate Bond ETF (NASDAQ: VCLT), end users must consider both credit and rate risk. After all, some issuers default, leaving bondholders with pennies on the dollar, if that.
Source
Originally published at www.fool.com.