VUSB ETF

VUSB performed well during monetary tightening but is now downgraded to 'Hold' due to lower yields in a monetary easing environment. The interest rate curve has shifted, reducing front-end yields by 90 bps, making VUSB less appealing. VUSB's portfolio is overweight corporate bonds and ABS, with tight credit spreads and a low 30-day SEC yield of 3.74%.

Vanguard today announced the launch of one of two new active bond ETFs. The Vanguard Core-Plus Bond ETF (VPLS) trades today on the Nasdaq.

The Vanguard Ultra-Short Bond ETF Shares has been performing well in the current inflationary environment, but there may be better options further out on the duration side. The VUSB ETF is an actively-managed fund that focuses on short-term, investment-grade fixed-income securities offering potentially higher yields and returns. The fund has a well-diversified portfolio with investments in over 650 securities, reducing risk and ensuring stable dividends and overall performance.

More investors are turning to active management for their fixed income exposure. In a poll conducted by VettaFi, a third of respondents have more than half of their fixed income exposure tied to active management.

Vanguard Ultra-Short Bond ETF Shares is a short duration bond fund with a $4 billion AUM and a 30-day SEC yield of 5.4%. The fund's portfolio exhibits a 5.76% yield to maturity, and its conservative allocation and structure contribute to a low historic volatility. VUSB is attractive in an environment with higher rates and increased bankruptcies, and it benefits from the resources provided by the Vanguard platform.