Which Is the Better Vanguard Short-Term Bond ETF, Corporate Bond-Focused VCSH or BSV's Treasury Emphasis?
VCSH targets corporate debt for higher yield, while BSV adds Treasury exposure for broader diversification. Both charge just 0.03% annually.
Overview
Conservative fixed-income investors may prefer the Vanguard Short-Term Bond ETF (NYSEMKT:BSV) for its Treasury exposure, while the Vanguard Short-Term Corporate Bond ETF (NASDAQ:VCSH) offers a higher yield by concentrating on corporate debt.
Short-term bonds often serve as a volatility buffer in a diversified portfolio, providing better returns than cash without the significant price swings associated with long-term debt. Investors comparing these two Vanguard offerings are typically deciding between the relative safety of government-backed securities and the slightly higher income potential found in corporate notes.
Details
Both funds target the one- to five-year maturity segment, providing a balance of stability and income that may appeal to those with shorter time horizons.
Source
Originally published at www.fool.com.