Which Long-Term Bond ETF Is the Better Buy: State Street's SPLB or Vanguard's VGLT?
Both funds own long-term bonds, but the risks they carry are completely different. Here is how to choose between corporate credit and government safety.
Overview
State Street SPDR Portfolio Long Term Corporate Bond ETF (NYSEMKT:SPLB) provides higher yield through corporate debt, while Vanguard Long-Term Treasury ETF (NASDAQ:VGLT) offers government-backed security at a slightly lower expense ratio.
Investors seeking long-dated fixed income exposure often choose between these two distinct paths. While both funds target the long end of the maturity curve with durations exceeding 10 years, SPLB takes on credit risk from corporations to generate income, whereas VGLT focuses on the safety of U.S. Treasury securities. This fundamental difference drives variations in yield and 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.