Which Is the Better Long-Term Bond ETF: Vanguard's Higher-Yielding VCLT or iShares' Treasury Giant TLT?
One fund owns thousands of corporate bonds at rock-bottom cost. The other owns 48 Treasury issues at five times the price. The five-year returns tell an interesting story.
Overview
The Vanguard Long-Term Corporate Bond ETF (NASDAQ:VCLT) focuses on high-quality corporate debt, while the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) tracks long-term government obligations.
Both funds target the long end of the maturity spectrum, which makes them highly sensitive to interest rate fluctuations. While they share similar duration profiles, the primary distinction lies in credit risk: one relies on corporate balance sheets, while the other is backed by the full faith and credit of the U.S. government. This analysis looks at how those differences impact yield, cost, and historical volatility.
Details
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
Source
Originally published at www.fool.com.