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Top 10 Corporate Bond ETFs

#6: Vanguard Intermediate Term-Corporate Bond ETF (VCIT)

 

VCIT tracks the Barclays Capital U.S. 5-10 Year Corporate Bond Index. The fund was launched in November 2009. The expense ratio is .15%. AUM equal $1 billion while average daily trading volume is 109KK shares. As of mid-January 2012 the annual yield was 3.86% and YTD return .49%. The one year return was 8.66%.

Data as of First Quarter 2012

VCIT Top Ten Holdings & Weightings

  1. CMT Market Liquidity Rate: 1.71%
  2. General Electric 6%: 1.06%
  3. Morgan Stanley 5.5%: 0.85%
  4. At&T 5.5%: 0.79%
  5. Goldman Sachs 6.15%: 0.71%
  6. Morgan Stanley 5.45%: 0.71%
  7. Wells Fargo & Co New 5.625%: 0.68%
  8. Verizon Communications 5.5%: 0.63%
  9. American International Group 6.4%: 0.58%
  10. Bank of America 5.65%: 0.58%

 

#7: SPDR Barclays Capital Short-term Bond ETF (SCPB)

SCPB follows the Barclays Capital U.S. 1-3 Year Corporate Bond Index. The Barclays Capital U.S. 1-3 Year Corporate Bond Index is designed to measure the performance of the short term U.S. corporate bond market. The Index includes publicly issued U.S. dollar denominated corporate issues that have a remaining maturity of greater than or equal to 1 year and less than 3 years, are rated investment grade (must be Baa3/BBB- or higher. The fund was launched in December 2009. The expense ratio is a low .12%. AUM equal $397M while average daily trading volume is 106K shares. As of mid-January 2012 the annual dividend yield was 1.74% and YTD return .90%. The one year return was 1.98%.

Data as of First Quarter 2012

SCPB Top Ten Holdings & Weightings

  1. General Electric 4.8%: 1.01%
  2. Citigroup 5.5%: 0.80%
  3. Cs First Boston 5%: 0.79%
  4. General Electric 5%: 0.75%
  5. Goldman Sachs 5.25%: 0.75%
  6. Wachovia Corp 5.5%: 0.75%
  7. Citigroup 6.5%: 0.72%
  8. Citigroup 5%: 0.69%
  9. Morgan Stanley 6%: 0.68%
  10. BP Capital 5.25%: 0.65%

#8: SPDR Barclays Capital Intermediate Term Bond ETF (ITR)

ITR tracks the Barclays Capital Intermediate U.S. Corporate Index. The index includes dollar denominated debt from U.S. and non-U.S. industrial utility and financial institutions with less than 10 year durations. The fund was launched in February 2009. The expense ratio is .15%. AUM equals $222M and the average daily trading volume is 45K shares. As of mid-January 2012 the annual dividend yield was 3.39% and YTD return .72%. The one year return was 5.22%.

Data as of First Quarter 2012

ITR Top Ten Holdings & Weightings

  1. General Electric 4.8%: 1.02%
  2. American Express 7.25%: 0.64%
  3. Morgan Stanley 3.45%: 0.63%
  4. Goldman Sachs Grp 5.95%: 0.61%
  5. Bear Stearns Cos 7.25%: 0.57%
  6. Morgan Stanley 4.75%: 0.56%
  7. Comcast Corp New 5.7%: 0.54%
  8. Merrill Lynch Co Inc Mtn Be 6.875%: 0.52%
  9. Morgan Stanley 5.625%: 0.52%
  10. American International Group 5.85%: 0.51%

 

 

Vanguard Long-term Corporate Bond ETF (VCLT)

VCLT tracks the Barclays Capital U.S. Long Corporate Index which is investment grade, dollar denominated with maturities greater than 10 years. The fund was launched in November 2009. The expense ratio is .15%. AUM equal $400M and average daily trading volume is roughly 56K shares. As of mid-January 2012 the annual dividend yield is 4.58% and YTD return .44%. The one year return is 18.60%.

Data as of First Quarter 2012

VCLT Top Ten Holdings & Weightings

  1. CMT Market Liquidity Rate: 1.58%
  2. General Electric 6.75%: 1.22%
  3. AT&T 8%: 1.14%
  4. Pfizer 7.2%: 0.93%
  5. Wal Mart Stores 6.5%: 0.90%
  6. Comcast Corp New 6.95%: 0.79%
  7. AT&T 6.8%: 0.76%
  8. Goldman Sachs  6.75%: 0.75%
  9. Deutsche Telekom  8.75%: 0.73%
  10. Shell International Finance 6.375%: 0.69%

#10: Pimco Investment Grade Corporate Bond ETF (CORP)

CORP tracks the Bank of America/Merrill Lynch U.S. Corporate Index with dollar denominated investment grade issues with maturities greater than one year. The fund was launched in September 2010. The expense ratio is .20%. AUM equal $187M with average daily trading volume of around 7K shares. One unique feature of CORP is that it rebalances its holdings monthly which might be a tax consideration for some investors. As of mid-January 2012 the annual dividend yield was 3.45% and YTD return 2.15%. The one year return was 7.31%.





















 

As the Fed continues to maintain a low interest rate policy while stock markets have been uncertain and volatile investors have flocked to bonds. To this observers must also take into account changing demographics which reflect an aging U.S. population demanding less risk and more yield on their investments. At some point investors may realize that yields, particularly for longer term issues will not exceed inflation and purchasing power. Once these facts dawn on investors, they'll seek higher returns elsewhere. For now however, the trend is your friend.

It's also important to remember that ETF sponsors have their own competitive business interests when issuing products which may not necessarily align with your investment needs. New ETFs from highly regarded and substantial new providers are also being issued. These may include Charles Schwab's ETFs and Scottrade's Focus Shares which both are issuing new ETFs with low expense ratios and commission free trading at their respective firms. These may also become popular as they become seasoned. 

For further information about portfolio structures using technical indicators like DeMark and other indicators, take a free 14-day trial at ETF Digest. Follow us on Twitter and Facebook as well and join our group conversations.

You may address any feedback to: feedback@etfdigest.com  

The ETF Digest has no current positions in the featured ETFs.

(Source for data is from ETF sponsors and various ETF data providers)

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Dave Fry is founder and publisher of ETF Digest, Dave's Daily blog and the best-selling book author of Create Your Own ETF Hedge Fund, A DIY Strategy for Private Wealth Management, published by Wiley Finance in 2008. A detailed bio is here: Dave Fry.

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