Good news for retirees as these ‘low risk’ investments go on sale
Investment Recommendations for Risk-Averse Investors:
- Certain investments traditionally recommended for risk-averse investors like retirees and "widows and orphans" due to their perceived lower risk profile.
- These include cash accounts, government bonds, investment-grade corporate bonds, real estate investment trusts, stocks in regulated utility companies, and shares of everyday consumer goods companies.
Content Details:
- The article discusses the types of investments considered suitable for risk-averse individuals.
- It mentions specific examples of these investments, ranging from cash accounts to stocks in utility companies and consumer goods manufacturers.
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Investor Interest in Bonds: There is a growing demand for bond ETFs as investors seek safer options amid concerns over high valuations in the U.S. stock market.
Record Inflows: Bond ETFs in the U.S. saw a record inflow of $51 billion in October, contributing to nearly $350 billion in total inflows for the year, significantly outpacing equity growth.
Credit Risk Appetite: Investors are increasingly willing to take on credit risk in corporate bonds to enhance yields in their fixed-income portfolios.
Economic Context: This trend occurs in a unique environment where the Federal Reserve is cutting interest rates while the economy continues to expand.
Vanguard Total Corporate Bond ETF Overview
- Current Price: The Vanguard Total Corporate Bond ETF (NASDAQ: VTC) is currently priced at $0.3208.
- Yield Information: As of August 27, the 30-Day SEC Yield stands at 5.06%, indicating a solid return for investors.
Dividend Details
- Payment Schedule: The next dividend is payable on September 4, 2023.
- Record and Ex-Dividend Dates: Shareholders of record as of September 2, 2023, will receive the dividend, with the ex-dividend date also set for September 2, 2023.
Additional Insights
- Seeking Alpha Rating: The ETF has received a Quant Rating from Seeking Alpha, which provides insights into its performance and investment potential.
- Dividend Scorecard: The dividend scorecard for the Vanguard Total Corporate Bond ETF offers a detailed analysis of its dividend performance, helping investors assess its reliability and growth potential.
Vanguard's High-Yield ETFs: Vanguard offers nine exchange-traded funds (ETFs) with yields over 4.84%, with the Vanguard Emerging Markets Government Bond ETF having the highest yield, while the Vanguard Long-Term Corporate Bond ETF is considered the best overall choice due to its balance of yield, low expense ratio, and strong performance.
Investment Considerations: When selecting an ETF, investors should consider factors beyond yield, such as costs, long-term performance, and risk levels, as different funds cater to varying investor priorities regarding safety and income generation.
Vanguard Total Corporate Bond ETF Overview: The Vanguard Total Corporate Bond ETF (VTC) has a 30-Day SEC Yield of 5.24% as of June 26, with a dividend payment scheduled for July 3 to shareholders recorded on July 1.
Investment Characteristics: VTC is characterized as an Intermediate Duration Corporate Bond Fund with an ultra-low expense ratio and has received a Quant Rating from Seeking Alpha.
Investment Options: The iShares Core U.S. Aggregate Bond ETF is a safe choice for bond exposure, but the Vanguard Total Corporate Bond ETF offers better long-term risk/reward potential due to its higher yields and investment-grade corporate debt holdings.
Market Considerations: Rising U.S. public debt may lead to tighter yield spreads between corporate and public debt, suggesting that if investors expect corporate bonds to outperform, the Vanguard ETF could be a more favorable option.
Investment Strategies in Volatile Markets: With stock market volatility increasing, investors are exploring diversification through ETFs that offer passive income, particularly those with dividend yields. Notable options include the Schwab U.S. Dividend Equity ETF, Vanguard Dividend Appreciation ETF, and Vanguard Total Corporate Bond ETF.
ETF Highlights: The Schwab U.S. Dividend Equity ETF boasts a low expense ratio and diverse sector exposure, while the Vanguard Dividend Appreciation ETF focuses on companies with growing dividends. The Vanguard Total Corporate Bond ETF provides safe exposure to investment-grade corporate bonds, yielding 4.5% amidst falling interest rates.






