Vanguard Short-Term Bond ETF

*Unless otherwise stated, data provided by FactSet.

BSV Fund Description

The Vanguard Short-Term Bond ETF tracks a market-weighted index of US-government bonds, investment-grade corporate and investment-grade international dollar-denominated bonds with maturities of 1-5 years.

BSV Factset Analytics Insight

BSV is a large, liquid ETF that holds a mix of investment-grade, dollar-denominated debt issued in the US with 1-5 years remaining in maturity. Treasurys dominate the basket, which also includes corporates, agency issues, and a small amount of foreign debt issued in USD. “Short-term” is in the eye of beholder: The inclusion of bonds maturing in 3 to 5 years gives BSV a longer-dated portfolio than our benchmark, which tracks bonds in the 1- to 3-year bucket exclusively. The hefty chunk of longer-dated bonds increases BSV’s weighted average maturity, interest-rate risk and yield compared with our benchmark.The exposure comes cheap—a low fee, solid tracking and strong trading volume keep all-in costs low. We estimate underlying liquidity to be middling, which is par for the course. The lone, small drawback for BSV is the issuer’s lack of transparency, as holdings are only posted monthly with a two-week lag. Note: Former rival ISTB changed indexes in 2014 to include high-yield bonds, which BSV avoids.

BSV MSCI ESG Analytics Insight

The MSCI ESG Fund Quality Score measures the ability of ETF underlying holdings to manage key medium to long-term risks and opportunities arising from environmental, social, and governance factors, as determined by MSCI ESG Research LLC. As of August 16, 2018 the Vanguard Short-Term Bond ETF MSCI ESG Fund Quality Score is 6.43 out of 10.

The fund’s Peer Rank reflects the ranking of a fund’s MSCI ESG Fund Quality Score against the scores of other funds within the same peer group, as defined by the Thomson Reuters Lipper Global Classification. BSV ranks in the 85th percentile within its peer group and in the 82nd percentile within the global universe of all funds in MSCI ESG Fund Metrics coverage.