Is Now the Time to Consider Long-Term Bond ETFs?

As the markets gradually recover from the banking crisis that plagued the financial world earlier this year, there is a growing sense of confidence among investors and advisors. Additionally, the unsettling issue of the debt ceiling debacle seems to have taken a back seat for now, encouraging investors to explore investment options with longer durations. Given the current economic climate, now may be an opportune time to look closely at long-term bond ETFs.

In light of this recent financial turbulence, investors are searching for assets that can offer both stability and long-term growth. When it comes to long-term bond ETFs, Vanguard presents a range of options that can help investors seize opportunities in this often-overlooked asset class.

Vanguard’s Top-Performing Long-Term Bond ETFs

The Vanguard Extended Duration Treasury ETF (EDV), truly stands out as an option worth considering. This fund has a specific focus on long-dated Treasuries issued by the US government — 20-30 year Treasury STRIPS. What sets EDV apart is the impressive year-to-date return of 6.13% it has delivered thus far. Additionally, the fund boasts a remarkably low expense ratio of just 0.06%, making it one of the most cost-effective options currently available in the market. EDV has seen significant investor interest over the past year, with net flows totaling an impressive $1.26 billion.

Investors who wish to diversify their portfolio with a range of bonds that mature over ten years can confidently turn to the Vanguard Long-Term Bond ETF (BLV). The fund’s portfolio includes corporate, Treasury, and foreign fixed-income securities. While BLV presents some higher risk due to exposure to both interest rate and credit risks, the considerable potential rewards are evident from the year-to-date return of 4.93% and an enticingly low expense ratio of 0.04%. The low expense ratio allows investors to maximize their investment performance without paying extra fees. Additionally, BLV has seen growing investor interest, evidenced by its net flows of $1.79 billion in the past year.

Other Long-Term Bond ETFs

Investors looking to add investment-grade corporate bonds to their portfolio can turn to the Vanguard Long-Term Corporate Bond ETF (VCLT). This investment-grade corporate bond fund has gained popularity in the market, with 12-month net flows amounting to $1.99 billion. With an expense ratio of only 0.04% and a year-to-date return of 4.91%, VCLT offers an attractive option for investors seeking long-term yields with minimal costs.

Investors who have their eyes set on long-term government bonds may find what they are looking for with the Vanguard Long-Term Treasury ETF (VGLT). This fund provides exposure to treasuries with a maturity of ten years or more. VGLT boasts of an accessible and affordable approach, with an expense ratio of only 0.04%, and a strong year-to-date return of 4.63%. Its popularity due to its performance is illustrated in the impressive 1 Year Net Flows totaling 2.6 B.