Question concerning Investment Grade Bonds
I wish to stick some reserve money in some bonds until current market conditions show signs of improvement. My question is, Bonds like Vanguard VCIT or EDV (examples only), I知 a bit confused with fees. I have a Vanguard acct, do these bonds essentially trade as stocks do? I知 confused about maturity dates? Any wisdom would be appreciated, like I said, I plan to sell once market conditions have a better outlook. thx
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You aren't listing bonds. You are listing ETFs, ETFs that happen to invest in bonds. Roughly speaking, these trade like stocks. They each invest in a portfolio of bonds. For example, at the time of writing, VCIT invests in 1841 separate bonds. That page also gives you additional information about the distribution of bonds and other information, including the fees. The expense ratio is 0.05% (which is really, really low).
VCIT and EDV are exchange-traded funds that contain many bonds - they are not bonds in and of themselves. ETFs trade much like stocks, unlike traditional mutual funds that only trade at the end of the day.
The fund managers will buy and sell bonds within this fund, so maturity is not a concern, meaning that the fund itself will not mature. When bonds that the fund invests in mature, the manager will buy new bonds to take their place.
Fees for ETFs are baked into the prices - they are deducted from the fund's overall value (and hence are reflected in its price). You may also pay transaction costs when you buy/sell (just like you would with stocks), but that's broker-specific.
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