BSV ETF

With capital markets expecting a rate-cutting cycle to begin, the yield curve has been steepening. But if economic data continues to reflect a hot economy, it may require keeping short-term bonds in play.

Blurring the lines between conference and festival, this year's Future Proof brought thousands of attendees to the summery shores of Huntington Beach in Los Angeles.

It's easy to draw in fixed income investors to long-term bonds with their yield. If they don't want a potentially bumpy rate-risk ride, they could consider options on the yield curve's front end.

Tech stocks, especially those focusing on AI, may be at the top of investors' mind when it comes to equities. But bonds have also been in the limelight as of late.

Vanguard Short-Term Bond ETF is a solid choice for short-term bond exposure due to low expense ratio and acceptable yield. The BSV ETF offers a compromise between current yield and potential appreciation in case of rate cuts, making it suitable for conservative investors. If you're looking for an alternative to "cash-parking" short-term US Treasury ETFs, this is the one to consider.

In the parlance of capital markets, the higher-for-longer phrase has yet to dissipate. The economy continues to run hot and yields rise.

Short-term bonds can offer the investor an ideal way to mitigate credit risk via an investment-grade focus while also reducing the rate risk that longer-term bond offerings can carry. That said, Vanguard has three options worthy of considering to get short-term bond exposure.

The past few years have been a boon for fixed income investors. That's because the Fed's aggressive rate-hiking strategy has been driving up yields.

A swift succession of interest rate cuts may not be in the cards for 2024. The Federal Reserve is deciding whether to hold rates steady yet again.