VCIT
Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares
Mentions (24Hr)
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Thoughts on potential recovery and rejection of SPY
Feedback on my proposed Three Fund Portfolio before I join the market?
Mentions
Put some of that VCIT allocation into BDCs! They would serve a similar function in your portfolio while yielding much more. Basically they would allow you to expand your credit assets from only large cap corporate bonds down to middle market loans. They carry more credit risk but come with the benefit of management overseeing the credit assets and maximizing yield.
Don’t have much to commespecifically on VCIT - but I think having some allocation to IG fixed income is good (I have some in mutual funds, locked in from 1 year ago and will continue holding them). On ex-China, I am super bullish on India and Vietnam, benefiting from supply chain moving away from China. But I am equally bullish on the China recovery play. It has been working through some tough resets amid external challenges over the last 3 years, and things are still cheap. There is a good chance that China may finally climb out of the deflationary mess / real estate correction and may even have its own ai renaissance next year. So purely for returns (political views aside), I would stay invested in China stocks. For Viet - honestly, there are not many good listed stocks. All are small and top ones are state-owned banks or real estate conglomerates (vinfast / vinhome, that may not be that good. Koreans / Japanese / Chinese actually run the businesses there. India is a macro story - super hard to pick and oligarchy / governance issues also exist (you can see the power at display when you watch the weddings of the top families there). I actually feel Chinese and Japanese companies are of better quality and valuation…
When are you planning on collecting Social Security? How much would you be getting from that source of income? Where in Jersey are you located? I can't see how you could live comfortably in that part of the country off 400K, no matter how you invest it. I am 66, living in Mexico, will apply for Social Security next January. I have a portfolio of 750K, which I have pared down to basically 50% VOO; 40% VCIT and 10% in my settlement fund (a money market fund at 4% annual interest). I ran the numbers and even if I wanted to, I could not afford to live on these sources of income in the NYC area, where I am from.
Actually yes, buy the dip. I would go 50% VOO, 30% VCIT, 20% MGKor similar
So should I move money into VCIT or leave it in TTTXX where it is?
You could consider an Investment Grade, Intermediate Term, Corporate Bond ETF like Vanguard's VCIT. 5.33% SEC yield right now. Could the yield go higher than that, pushing NAV down? Not by much, but you can still hold and enjoy the higher yield. What if yield goes down by a lot, pushing NAV up? You could sell and go do something else. I have $150K each invested in VCIT and collect a cool $500+ every month. I am seriously thinking of adding another $500 cash flow by investing $150K more.
I hadn't even heard of VBIL until you mentioned it. Looks good. A fairly recent addition to their lineup I think. I use VCSH for cash equiv and then tier up to VCIT, BIV, etc. All more volatile than VBIL or SGOV. Unf, if rates remain high, they'll continue to underperform.
I hadn't even heard of VBIL until you mentioned it. Looks good. A fairly recent addition to their lineup I think. I use VCSH for cash equiv and then tier up to VCIT, BIV, etc. All more volatile than VBIL or SGOV. Unf, if rates remain high, they'll continue to underperform.
you mean default risk? yes, possible. tariffs and investors fleeing US assets wholesale mean there’s also inflation risk. so spread the risk out with a intermediate corporate bond etf: VCIT for example.
Quick analysis points to long duration treasuries (TLT, EDV), corporate bond etfs (LQD VCIT) or gold etfs
I include HY bonds in my bond portfolio by putting 70% in BND, 20% VCIT, and 10% in VHELX. I don't recommend it because it adds complexity, and it is probably best to take your risk on the equity side. I haven't looked over the last couple of months, but credit spreads were tight at the beginning of the year, so high yield wasn't very attractive at the beginning of 2025.
Trying to tell him to save money for when he's 70 is just silly. At 16, 54 years away may as well be 540 years away. Instead, make him do the right thing with at least half of his money. Open a custodial eTrade account, and put half his money in it. The other half goes in his piggy bank, custodial savings and checking, or whatever he wants. And keep a very simple spreadsheet of his "today Son" money and "tomorrow Son" money. Today money is money he keeps handy, and Tomorrow money is what's in the eTrade acct. that is a one-way trip for now, and not to be withdrawn from under ANY circumstances for at least 10 years (26 isn't as far away as 70, lol). Let him choose, within reason, how to invest some of his custodial account - FDMO & FDVV, VOO, SCHD, TBLL, VCIT, whatever, but make sure they're good, stable, mix some dividends with some growth, and maybe let him pick stocks of products he is familiar with, like Pepsi / Coke, or Colgate / P&G. Giving him some choice will give him a sense of ownership, rather than just something you're twisting his arm and making him do. Tell him something VERY VERY VERY important. This isn't the Star Trek universe, where stuff comes out of a replicator for free. You're going to start adult life working for money. That means YOU are a servant, and MONEY is your master. That's not good, but it's necessary to function in polite society. Your goal should be to turn the tables, where YOU are the master and MONEY is your servant - or, in other words, instead of working for money, your money is working for you! You can only get across that threshold by investing, and having assets that do that work of making your money make more money. And since you're not a billionaire, stacks of gold or acres of real estate isn't practical, but stocks and ETFs are. You can have him set goals, like, "my money makes so much money, it buys a meal out to eat once per month." The next goal might be "my money makes so much money, it's a car payment every month." But you keep adding to it, not taking away. By the time he's 30, he may actually be able to skim off the top for a meal out to eat every month, and the rest can continue to the grow the portfolio. Maybe by 35, it will be his car payment - again, leaving some of the D&I in to continue growing. And by then, he should be married, engaged with a career level job, and probably also have a 457 and/or 401k. And his regular portfolio is just another income source - a second job, but without having to work another 40 hours per week.
If you have only $100K right now need income and cannot work, buy intermediate term bonds. I recommend VCIT and VGIT. They will pay a combined almost 5% and give you close to $400/month income. They will hae some ups and downs in price but will continue to pay the dividend unless there is a total calamity. When you get your share of the house, you can decide if you are positioned to take some risk in equities. Right now, I think you are not.
0% Interest and you wouldn’t? with RH gold that gave me 1k Interest free, no due date. With that I threw it into VCIT and now i’m collecting interest for free.
What is your goal for this money, and what is your goal for the bonds? VGLT is my favorite long term, SGOV is my favorite short term, VCIT is my favorite general corporate, ICVT is my favorite tilted corporate, and JBBB is my favorite corporate adjacent. I believe they're all good, but they have wildly different purposes depending on what level of return you're looking for within what timeframe.
High yield funds are risky by their nature; investors could both lose significant principal and have their distributions cut. If you want income, the you want to invest in a fund with limited fluctuation in principal. Figure out how much money you need for expenses for several months and put that in a HYSA. With anything above that, you can reach for a little more income with an investment grade bond fund like VCIT.
I've been retired for 9 years and think your goal is correct since a sustained market drop can crash retirement plans. There are a couple of other factors, marital status and portfolio size. Your plan needs to include what happens if a spouse passes away - you lose their social security and the surviving spouse needs to be comfortable managing the investments. I sold VOO, partially replaced it with VTI and added SCHD and DGRO. Since I am forced to take RMDs some of this is in a taxable account. I have also increased bonds to 40% - half in BND and the other in VCIT. I am gradually changing the bond allocation between these two since VCIT is more correlated with stocks.
Thank you for the detailed explanation. I meant to refer to VGIT but it’s good to know you also like VCIT.
The SEC 30day yield was invented for the same reason the Annual Percentage Rate (APR) and Annual Percentage Yield (APY) were invented—to be able to quickly compare disparate products in an apples-to-apples way. The SEC number gets close to the yield you'll experience in real life, but it's incomplete because it tries to build a picture using data from just the last 30 days. The YTM or YTW that's found on the issuer's website (Vanguard for VCIT and Schwab for SCHO) is the best source for the yield number. Morningstar also aims to keep its data current, and the YTM numbers I publish usually come from Morningstar's website. Once you're looking at a security on Morningstar, find the YTM on the Portfolio tab. VCIT happens to be one of my fave bond ingredients for quality corporate debt. (I'm just not invested in it now because I feel the risk/reward of Treasurys is better at the moment.) Morningstar shows VCIT's 30day SEC Yield as 4.87%. But the YTM number for VCIT is 5.10%. Both numbers are forward-looking. Both numbers are also ultimately untruths because they take a frozen snapshot of the portfolio as it looks like now, and imagine that portfolio being allowed to mature. That's never going to happen in a fund unless it's a target-date fund—assets are always getting sold off and replaced. But the YTM does get you super close, and in the case of VCIT, if you hold for its duration of 6 years, you'll experience that roughly 5.10% YTM as a total return—part of the total return will come from monthly coupon payments and the remainder will be experienced as a price increase in the shares of VCIT etf itself (as the average price of its bond inventory rises to par).
Which yield do you look at? I’m seeing the 30 day SEC yield for SCHO as 4.07%. Is this fund much different than VCIT?
The decision needs to consider the split between the IRA and regular brokerage account. When you reach 73, you will be forced to take RMDs from the IRA and pay taxes on the withdrawals. That being said - I am a few years older and also don't need money from my IRA so I invest 50% in VTI 15% in BND and 15% in VCIT (there are other ETFs that duplicate these) and keep the rest in a money market fund I use to take my RMDs and pay the taxes. In other words, I don't have to sell any of the investments for the forced withdrawal.
I agree. I have $250K in VTI, and $250K in equivalent cash waiting to go into VTI (ups and downs as they come). For completeness: I have $150K in VB/VIOO, $100K in VXUS, $50K in SMIN, and $300K in VCIT. I also have some play money in individual stocks. A recent one that has done very well is COST. I also have GOOG and it is in the money in spite of some recent turbulence. Other long term holdings (mostly 10 years +) are DiS, AAPL, and QCOM.
Crypto surprisingly. I’m a set it and forget it kinda person, and my $1000 is up 105%. Of course I know how volatile it can be, which is why I only threw in a grand. The rest of my portfolio is uninteresting VWO, VCIT, VOO, etc
When they do finally cut rates, it'll be pretty sweet for my VCLT/VCIT losses
1. **MMF/HYSA** (money market fund/high yield savings account). These 2 are where you will put money you need risk free, preferably for an emergency fund. A MMF will have higher interest, currently at about 5.3% / year, however you can only withdraw during regular business hours, an HYSA has a slightly lower yield but can be withdrawn instantly. Obviously they both have their uses, this is on you to split up exactly how much should go to each, for emergency funds 2. **Investments**. First, you’ll need to setup 2 main brokerage accounts (I use TD Ameritrade/Schwab, some other common ones include E-Trade & Fidelity), a. An individual/standard account, b. A Roth IRA (retirement account) Max out contributions to your Roth IRA for the given year before you contribute to the individual, although any excess goes there. To make it simple, invest all the money you make past saving for an emergency fund & current living expenses in $VTI or $VOO (US total stock market and biggest 500 companies in the US, respectively), they’re both very similar, doesn’t matter that much which one you end up choosing. If you want you can also put a little bit into $GLD (Gold) or $GOVT (treasury bonds) or $VCIT (corporate bonds), but most of it is good in $VTI or $VOO. Do *not* touch the principle, that means whatever you put in, stays there. This will compound exponentially and before you know it, you’ll have made yourself a solid sum. Remember tho; contribute to Roth IRA before anything, then if you have excess money to invest, then invest in the individual account
If you aren't in the top tax bracket you don't need munis. I would do VT and VCLT ( VCIT if you think inflation is a longer term problem ) I would bump up small caps VB and for international exposure I would use EMXC, VYMI and/or VSS
Your Corporate bonds funds didn't tank last year? I'm still down 20% and 11% (ignoring dividends) on VCLT and VCIT, even with a little dollar cost averaging in March this year. I took my profits from 2021 and rebought them end of year, so essentially purchased at their peaks.
SMH lost 75%+ from May 2000 to October 2002. No way to know if we're in a bubble or it'll eventually correct and march higher. The Nasdaq took 15 years to get back to even after March 2000. The XLK is approx 22% Microsoft and 22% Apple, with some semiconductor exposure, that's more than risky enough for someone like OP. By bonds do you mean treasuries or Corporate Bonds? VCLT was averaging 7% annual gains and VCIT was averaging 5% (then came 2022) Now they're only averaging 3.25% & 2.65% over the past 10 years respectively. Semiconductors should remain lucrative over the long term, but don't forget the saying "real estate always goes up": The VNQ peaked February 2005 and took 10 years to come back to those levels.
Some intermediate and long term investment grade bond funds are paying close to 6% and the risk (of getting your income each month) is pretty low (the risk of losing NAV is moderate). Check out VCIT and VCLT. Look at the "SEC yield", not the cash yield. The cash yield i about what you get next month. The SEC yield is the approximate total average yield, over time, of all of the bonds that fund current holds.
You can combine dividends and growth much to the dismay of the herd. There are opportunities out there for that approach. I would focus on, as most have suggested, simple strategies. Maybe you’re 50% VOO, 25% SCHD and 25% Corp/Gov Bonds (VCIT or BLV). Here’s the rationale - VOO is being propped up by the ‘magnificent seven’ right now. It’ll give you the exposure to the growth you want. SCHD will give you the exposure to quality companies with strong balance sheets outside of tech. I actually recommend bonds for the first time in 20 years because there’s actual upside to be had and intermediates, at relatively low risk, are yielding close to 5% with room to boom once inflation is defeated. You can’t beat the monthly DRIP on these at the present and most people on this sub ignore bonds at their peril.
If you hold until maturity, there is no real risk with Treasuries of any duration, just potentially opportunity cost. But bond ETFs don't let you hold until maturity since they are always laddering. The capital gain potential of a bond ETF is based on the potential for bonds of that particular duration to have a change in yields. My argument is that intermediate are already fairly strongly inverted, so they have less capital gain potential. That doesn't make them a bad investment, I just think I would personally prefer longer duration. As for BND, the high level of MBS is unattractive to me. Since MBS are agency backed, their higher interest rate is actually nice if you were going to hold until maturity the way big banks do. But they have negative convexity, which basically means they will not appreciate as much with a drop in yields as they would fall in the case of a rise in yields. So, if intermediate duration is the goal, I would personally prefer to combine something like GOVT, VGIT, or IEF for Treasuries with VCIT for corporates, and leave MBS out of it. I am presently holding Treasuries only, and am watching closely for a widening of credit spreads at which time I'll rotate into corporates. Credit spreads are so narrow right now compared to historical norms that I don't think corporates are worth the risk. If you want higher yield, I think there are some preferreds that might give better reward for the risk (LANDP, BEPH, ABR-D, as examples).
SGOV is one step away form a Money market fund. Good income in the moment, but not guarantee for more than a few weeks. I am in VGSH, VCSH, VCIT, VGIT, VWESX, and VUSTX - I am going for a mix of treasury and investment grade corporate bonds - some short term, some intermediate term, and some long term. I am about 50/50 Treasury/corporate and 25%, 60%, 15% short, intermediate, and long term
VOO vs VGIT vs BSV vs VCSH vs VCIT? I want to dump $280 a month into it and buy a rental property within the next 4 years.
Buy him a magnet that says 60%VT 40%VCIT Day trading against computers is not smart
I think in her case it was a single manager who collaborated with a team. Ask them how they make decisions because it wouldn't surprise me if a team decided to buy VGK (European ETF) and a bunch of other random stuff like VCIT (intermediate term corporate bonds), and it wouldn't surprise me if its just a guy who reads wallstreetbets and picks random ETFs.
If I do bonds such as BND and VCIT, can I assume that the bond price itself will also appreciate as interest come down within next few years?
The definition of index fund is pretty broad. I am retired and have a lot of money in VCIT and VGIT outside of my 401K and VBTLX in my 401K. those are all considered to be "Index Funds" of various bonds models. I also have quite a bit of VINIX in my 401K which is a lot like VOO - maybe exactly the same. If you could all of that, I am around 70% index funds, of one sort or another
As long as you you are confident you won't allow it to affect your life if the market takes a big hit, go for it. It is absolutely your best bet for long term wealth growth. But it could be a rocky road. Until about a year ago, equities was your only real path to getting a return. Now bonds pay a real return. VCIT (Vanguard intermediate term investment grade bonds fund) has an SEC yield of over 5% now. Just saying.
I’m in BND, CMEUX, MBB, VCIT, VGT, and IF
The fund VCIT is designed to track the performance of 5-10 year corporate bond index. If you need liquidity in less than 8 years, an intermediate corporate bond product may be inappropriate for your time frame. If interest rates go down, the value of the fund will increase but if interest rates go up, the value of the fund will decrease. So the yield will fluctuate with the value of the fund. If you believe that you need liquidity in 1 year and you do not wish to have interest rate risk, you have to pick a short duration bond fund. For example - if you want to invest in investment grade corporate bonds and you want to have your money back in Dec 2024, a simple approach is to use a target maturity fund like IBDP or BSCO and reinvest the monthly dividends. You can simply hold the investments until Dec 2024 when the fund liquidates. [https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&ticker=BSCO](https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&ticker=BSCO) [https://www.blackrock.com/us/individual/products/272345/ishares-ibonds-dec-2024-corporate-etf](https://www.blackrock.com/us/individual/products/272345/ishares-ibonds-dec-2024-corporate-etf) Yield should be in the 5.8% annual range at the moment. The interest from these funds should be higher than a bank high yield savings account.
How do you define "temporarily"? VCIT is an investment-grade corporate bond fund with an average effective maturity of 7.5 years. And yes - there is a big difference between investing in a bond fund versus depositing funds into an interest bearing bank account.
Can I just park my money in VCIT temporarily? Is there a real difference between buying shares of it vs a hysa?
I don't really know much about fixed income so bear in mind that some of the nuances are outside my knowledge and experience. ​ >I had come across this, my impression was that the risk was in line with junk bonds but perhaps slightly less. My understanding is that most junk bonds are unsecured notes. ​ >Also I'm a little confused on why duration matters with a bond fund. I saw that you posted similar question yesterday - did you understand the response. Funds are basically constant duration so it's like a perpetual bond ladder which ends up looking like an average duration and maturity. Bear in mind that there are target maturity funds as well. So with your 2 year horizon - you could use target maturity funds - like the ones from Invesco (Bulletshares) and Blackrock (iBonds). ​ >Why would someone invest in VUSB or VCIT vs VCLT for example? Or UTWO vs SGOV? The differences are in average duration and credit quality. ​ >would it make sense to dedicate a small portion of my 2 year investment strategy to equities? Like maybe 10-25%, while the rest is in fixed income? I don't like to provide an opinion on something like that. Because it's mostly down to your own personal financial situation and risk tolerance.
Deduct your age from a hundred, that's the percentage of money that will go into VTI. The rest will go into three securities: 50% into BND, 25% into VCIT and 25 % into VCLT. Forget about your investment and check back in 20 years. Write me a thank you letter when you are rich :)
Basically there are 3 risks you get paid for: credit risk, duration risk and call risk. Because the yield curve is inverted call and duration risk aren't doing much. But credit risk is. VCIT/VICSX with less credit risk has exactly the 5% yield you are asking for. Even a fairly high quality junk bond fund like VWEAX is yielding 6.66%. HYG which is the junk bond fund the future is based on is yielding 7.66%. Way up the risk ladder you have funds like ECC with yields over 25% but there you are taking substantial risk (fairly high risk CLOs).
Thanks, after I made this post, I went and looked at the chain and the bid-ask spread is unbelievable. I looked around and have found some different tickets where the spread isn’t quite as bad, like VCIT. But those are pretty different underlyings, and still pretty illiquid.
I like to keep it simple- VCSH and VGSH for my corporate and government short term exposures. I bought VCIT- the intermediate corporate term bonds when it bottomed out in October. I got a little lucky with the timing on that one. I could see those retesting the bottom they reached earlier this year if inflation stays high and we have to keep rates "higher for longer" as the fed has been pushing that narrative pretty hard. I would also consider longer term maturities if we retested that same level again- hard to say if that is going to happen or not though. It's very clear inflation has rolled over, the economy is cooling, cyclical industries across the board are taking a beating, and the trend is in the direction that the fed wants. The question now becomes how deep does it have to go to get the desired result of inflation into target range, when does the pivot come, what levels do we plunge to on equities- we just need time to get there. Patience is key. The good news is that bonds are a fantastic hedge now against equities going down. I wouldn't be surprised if you start seeing "flight to safety" in the news within the next 6 months.
Gamma squeeze was mostly a joke. I’ve noticed a couple bond funds allow options but have super low volume/open interest (HYLB, BND, VCIT, EBND). And I’m generally curious as to what would happen if the apes decided to start throwing bananas around bond fund options. For me though, I’m holding the underlying in my IRA and am selling covered call for extra juice.
Yeah, the lesson I learned is not necessarily that VCIT is bad, but not to use a socket wrench as a hammer.
I guess this is also a good time for you to learn about spreads. At the same time Treasury rates have been increasing, investment grade corporate spreads over Treasury have also increased 0.5-0.75%, meaning that the yield change in corporate bonds exceeded the yield change in Treasurys. Multiply by that by VCIT's 6 year duration and you're in for a bad time.
This was more of me not understanding my investment properly. What I was trying to do was get a little better yield than a savings account for a short duration. What you shouldn't do is buy VCIT for this purpose because you believe corporate bond funds are "safe"
Well JEPI could make sense if I'm understanding the risk profile correctly. Meaning if you think the market will be flat or downtrend, then wouldn't the covered call strategy make sense? I'm not trying to talk you out of it...just providing something I observed when looking into this fund. Whenever I think about add/remove/etc I ask "How does this move help me achieve my purpose of {fill in the blank}" ​ Full disclosure: I used to be 80/20 VYM/VCIT...rode it all the way down over 2022 and exited 3% gain for the year and now in 100% 8 week treasuries to get the yield I was seeking from VYM without the daily volatility. I failed to fully understand what happens to an ETF like VCIT in a rapidly increasing rate environment. So my point here isn't that JEPI is good or bad...it's just suggesting you understand what happens to an ETF like that in various scenarios and are you willing to accept those risks. Once I learned my lesson, I'm clearly less risk tolerant than I thought.
There's a limit via treasury direct but it's way over $75K. I don't see a "low risk" 6-7% option except for the ishares, ibonds ETF: [https://www.ishares.com/us/products/308563/ishares-ibonds-2023-term-high-yield-and-income-etf](https://www.ishares.com/us/products/308563/ishares-ibonds-2023-term-high-yield-and-income-etf) The average YTM on this ETF is 5.85% and because the bonds are held to maturity and dissolve the fund at the end of 2023 and returns all the funds. There's always default risk so it's not risk free by any means. This is what I've been really reading everything I can about to fully understand the risks after getting burned with VCIT.
I was invested in VCIT. The key is to understand what bond duration means. Every time rates are raised, VCIT has a big sad. If you feel that the coupons are fine, you still have the interest rate risk. Me personally, am out of bonds that I don’t hold to maturity.
What about bond ETFs such as VCIT and AGG?
How do you plan to play the bond bounce? Short/intermediate/long term funds like VCSH/VCIT/VCLT?
At least VCIT’s losses since January have been less than those of stocks!
I understand. Thanks for all the clarification. I bought VCIT in January thinking it was a safe bond ETF because I liked the coupons of the bonds and wanting to diversify out of stocks. I suffered significant loses and until this thread really didn't understand why...I thought the companies weren't paying or something. I then went individual treasuries trying to get directed YTM...when this product was here all along.
I bought VCIT with my annual bonus in February. I buy the dip with each monthly dividend payment.
I’m in VCIT and taking a bath on the equity side. The monthly dividend is nice and I’m just hoping I can continue to ride it until the fed cuts the rate again next year.
Absolutely. Plus these are great cost effective picks. Absolutely the best choice. VCIT also good. Also if you want to go below just surface level investing, know these terms as they're helpful for this sub. "Dollar cost averaging is a strategy that can help you lower the amount you pay for investments and minimize risk. Instead of purchasing shares at a single price point, with dollar cost averaging you buy in smaller amounts at regular intervals, regardless of price. Over the long term, dollar cost averaging can help lower your investment costs and boost your returns." Index ETF: Designed to track a particular index like the S&P 500 or NASDAQ ETF is a basket of securities that you can buy or sell through a brokerage firm on a stock exchange. ETFS are offered on virtually every conceivable asset class from traditional investments to so-called alternative assets like commodities or currencies. ETFs that track the whole market are great for beginners and even advanced traders due to their lower risk, hands off, let your investment work for you, approach. Also, can set up finds dispersed between index, bonds, and a small portion like 10% to a stock you think will perform well. Overall, knowledge of ETFs, index funds, bonds, will help give you a good place to start. Some companies also offer investing through automated methods that disperse your money to funds based on age and can choose your risk tolerance. Their fees are extremely low and will be a small step above choosing your own index funds by diversifying them for you.
Should I split up the three fund portfolio into something like this? VOO, VTI, (another us etf?), VXUS or VT or VEA, and a bond etf (VCIT, VTC?) I would give equal weight to each, so it’s still 60% us, 20% international, and 20% bonds
Marcus is aggregating deposits to buy a short-term government bond portfolio to create a spread. You can indeed recreate this for yourself with a short-term treasury ETF, like VGSH, which pays a significantly higher yield. The trade-off is that you can experience a loss of principal, whereas your Marcus account has a stable value. Check the 12 month price return of VGSH and consider whether that trade-off is worth it. I personally have my emergency funds in VGSH, because the fluctuation is worth the yield upgrade to me. Some people have gone further out in duration, like VGIT, or even into lower credit quality with intermediate corporates like VCIT, but I think that’s defeating the purpose of holding an emergency cash reserve. Expect that an economic downturn is likely to be happening when you need your emergency cash.
Yeah, it's become a little bit more palatable to buy bonds with rates up. I rotated out of JNJ/PG yesterday into VCIT. Not a large position, but serves a purpose.
Feedback on my proposed portfolio? All my money is in cash right now. Just starting off my career at 34 years old. Type | % Portfolio | Fund ---|---|---- Large Cap Blend | 25% | VTCIX Mid Cap Blend | 20% | VSEQX Small Cap Blend | 15% | VSTCX International Markets | 10% | VTIAX Emerging Markets | 10% | VWO Corporate Bonds | 15% | VCIT Cash | 5% | ------- Allocation advising: https://smartasset.com/investing/asset-allocation-calculator#ZqDrsN62Ah Rankings: https://money.usnews.com/funds/search
Did the same (corporate bonds - VCIT) with 40% of my portfolio last week. Might be too early, but it is at such a discount right now, I couldn’t resist any longer, it is basically at 2020 lows right now.
Corporate bonds (VCIT) hit the 200 week today. If I was in a knife catching mood, I’d snap it up, but I’ll be patient instead and see if it can hit the March 2020 lows.
There's not much I like right now. VCIT or LQD are investment grade corporate bond ETFs that are a good place to park cash and earn a bit of income in a stable or declining rate environment. But, we are in a high inflation, rising rate environment, which is why you see these experiencing significant declines. If you go into VTIP, be advised, my view is this will do well as long as inflation remains high. When inflation starts to moderate and the Fed rate hikes slow, you'd want to shift into VCIT, LQD or something similar.
Is there a reason you're hesitant to open an account at Vanguard? It's not difficult, but I can understand if you would prefer to limit the number of accounts you have open. That aside, you can come pretty close to VWINX at Schwab or Robinhood by putting 40% of your funds in VYM (Vanguard's High Dividend Index Fund) and 60% in VCIT (Vanguard's Intermediate Term Corporate Bond Fund). This option has the additional benefit of avoiding Wellesley's often large, year-end capital-gains distributions, which can be a real pain in a taxable account even if you're in a low tax bracket (that is, it will reduce the size of your refund). I see no reason to pay any transaction fees.
I'm 36 so I have very little bond exposure but I do have about a 10% allocation in one of my IRA accounts. It is VCIT which is a Corporate Bond ETF. Yield is over 2% and the holdings are diversified across a lot of blue blood companies. I love it for the yield because it is above the average yield in the S&P.
Awesome. It's always nice to look at a conservative portfolio for a change. What made you go with HYG and LQD over VCIT? It has similar returns and diversification with a lot less volatility.
$10k in I-bonds in 2021 and 2022 for a total of $20k(10%) in I-bonds, to protect against inflation OR a downturn. 50%($80k) in SPHD to get monthly dividends from stocks 20% VCIT/20% VCLT to get monthly dividends from bonds.
Don't write off bonds. It would be malpractice for you to not buy bonds in this situation. If it is obvious to everyone that rates will hike? It's priced in. If you think the market's pricing it wrong, and the Fed will hike rates sooner and larger than expected? You only expect prices to change to reflect the delta between your expectations and the market's expectations. If that delta is huge you need to really question your assumptions. Also, don't forget TIPS exists. The 50% in medical expenses - that number will always go up, unfortunately. This needs to be an ultra-safe portfolio. I would not expect more than 10% equity exposure. Anyway, would be interesting if you checked back in a few years and see how the recommendations in this thread held out. You're getting a lot of recommendations here and I wonder how it'll all pan out. [Throw this one](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2021&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=5&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=true&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=CASHX&allocation1_1=10&symbol2=VTIP&allocation2_1=30&symbol3=VCIT&allocation3_1=30&symbol4=VCLT&allocation4_1=10&symbol5=VGLT&allocation5_1=10&symbol6=VT&allocation6_1=10) into the ring for me.
Yuck. Was thinking this might be quick pull back based on the gap up in corporate bonds and green candle in VCIT. However, that is now a reverse doji, going into the final hour. Looks like more selling is still to come.
VCLT has higher yield than VCIT (since it's long term bonds), I think you probably mean VCSH which is shorter term and lower yield? FWIW, I've used both VCSH and VCLT in the past (mostly as a hedge, to book paper losses in my home currency when it strengthens against USD).
I use VCIT. No particular reason other than it seems to have a better yield than VCLT with only marginal more risk. Might be my perception is wrong.
Yep if you want to diversify makes sense to have multiple segments. Ive been known to hedge a bit with BTC, GLD, VNQ, VCIT.
Why off the radar? 10 year hold? VOO VCIT PHO AWK 10 month hold? VNQ GLDM SCHN 10 day hold? CLL puts
Treasuries pay so little because they are the safest, lowest risk investment. To earn slightly more you have to take on slightly more risk: corporate bond ETFs. Examples of corporate bond ETFs include VCSH and VCIT (there are others so look around). You can buy shares of those and get paid dividends each month. They’re diversified, because you’ll effectively be buying thousands of different bonds all at once.
The information is already public so any impact it will have has mostly already happened. In general it would be expected to push the value of VCIT down. Yields being low is indication that demand is high. It would not indicate falling demand.
Given the Fed is selling Corporate Bonds ([https://www.wsj.com/articles/fed-plans-to-sell-13-7-billion-of-corporate-bonds-etfs-by-year-end-11622666400?mod=hp\_lead\_pos3](https://www.wsj.com/articles/fed-plans-to-sell-13-7-billion-of-corporate-bonds-etfs-by-year-end-11622666400?mod=hp_lead_pos3)), What do you all think this will do to the value of ETF's, like VCIT? I'm assuming since the Fed is going to be 'flooding' the market with new supply, and demand is staying consistent (or even been reduced because yields are so pathetic), then it will cause the value of VCIT to go down. Is that correct? Bonds price movement confuse me ¯\\\_(ツ)\_/¯
What do you all think this will do to the value of ETF's, like VCIT? I'm assuming since the Fed is going to be 'flooding' the market with new supply, and demand is staying consistent (or even been reduced because yields are so pathetic), then it will cause the value of VCIT to go down. Is that correct? Bonds price movement confuse me ¯\\\_(ツ)\_/¯
Based on your time horizon the fund choices and DCA strategy seems sound. If you are looking for less volatility than maybe considering adding a consumer staple fund like VDC or even a corporate bond fund like VCIT as percentage of your overall portfolio. You'll get a smaller return during bull markets but if less volatility helps you stress less than it might be personally worth it for you.
Hey everyone! Up to now I have only invested into mutal funds but recently started to do research so I can invest on my own and avoid fees. I'm 29 years old and setting up my investing account for retirement. My idea is to invest into ETF's so that most of my investing is on auto piolet. The portfolio I have set up for myself is 50% into an S&P 500 index etf (VOO), 25% into a high dividend yield etf (VYM), 15% into REITs (VNQ) 5% into Bonds ETF (VCIT) and 5% into TIPS (VTIP). The goal of this account is for my retirement. I do get a pension through work but I would like to have a back up. If there is any constructive criticisms to this portfolio layout, I would love to hear it and thanks in advance.
I have already put about 30% of my money in Gold, Mortgage and Corporate bond ETF. With 7% cash on the side. With the bonds and mortgage etf’s I am collecting dividends every month and the share price doesn’t fluctuate much. Check out VCIT, VMBS, SCHP and IAU (for gold hedge). I still have around half my money in stocks though. This is just my play.
VCIT is a corporate bond fund. Bonds don't always move the same direction as stocks. In fact, that's why a lot of people own bonds. A lot of the time when stocks are down, bonds are up (recent experience notwithstanding). That gives your portfolio a little stability and makes the swings less wild.
That's a good point, thanks. Yeah, it's all ETFs and closed end funds. Examples of green ones this morning are FNDX, FNDA, SCHF, SCHE. My red ones are def bond-related - SCHR, VCIT. Thanks for the insight, I really need to learn more about this stuff.
Can someone explain why VCIT seems to go opposite of everything else? It's part of my IRA portfolio and when almost everything else is green it's always red...guessing something to do with balance since I currently let the Schwab robot manage the IRA while I learn with a small trading account...
I'm using it as a bond replacement in my portfolio. I already owned VTI, VEU, VBR, VWO, and VCIT. VCIT has done crap over the past 5 years, and bonds are probably going to do crap over the foreseeable future. So I converted my VCIT into QYLD and will take the dividends.