Just-released June 30 performance numbers show how investors can benefit from owning individual bonds instead of bond funds. Please see the below
returns summaries that compare my investments in individual bonds to those of large bond funds and ETFs. I hope you can attend the July 25th
premier of The Bondcast where I will reveal my next corporate bond investment recommendations.
Returns through June 30, 2017:
Investment-grade corporate bonds: +7.22%
High-yield corporate bonds: +6.97%
Large bond fund and ETF returns
Vanguard High Yield Corporate Fund (VWEHX): +4.82%
Vanguard Total Bond Market Index Fund (VBTLX): +2.40%
iShares Investment Grade ETF (LQD)*: +4.19%
iShares Core US Aggregate Bond ETF (AGG)*: +2.20%
Individual corporate bonds can, at times, also provide better returns than the stock market, as my high-yield investments drove a 31% annualized return in 2016 compared to a full-year 12% total return for the S&P 500.
*iShares data are through 7/5/17.
Please click here to view my full set of returns calculations.