Vanguard Total World Bond ETF

BNDW

Market cap $1.88B

BNDW pays you monthly from bonds issued by governments and corporations across more than 50 countries, all wrapped in a single fund that costs almost nothing to own.

Pariah Capital's strategy is one thing that's been winning during the Iran conflict.

With just two ultra-cheap Vanguard ETFs, investors can build a comprehensive stock/bond portfolio. The Vanguard Total World Stock ETF (VT) includes a mix of 65% United States, 25% developed markets, and 10% emerging markets stocks.

As fund flows during the month of July indicated, more investors continue to head overseas in order to get international bond exposure according to data from Morningstar. For those looking to overcome their U.S. bond home country biases, Vanguard has three funds that are worthy of consideration.

With talk of rate cuts getting more audible, they almost seem inevitable. Indeed, the CME FedWatch is forecasting an almost 90% chance of cuts.

Fixed income has historically outperformed equities during crises like the tech bubble burst and the Great Financial Crisis, driven by wide valuation differentials and a risk-off sentiment. Current conditions, including high equity valuations, a risk-off sentiment, and a favorable inflation trajectory, suggest bond ETFs like BNDW may outperform equities on a risk-adjusted basis. Despite potential headwinds from monetary policy and fiscal changes, fixed income offers high yields with minimal capital loss risk, making it a strong portfolio hedge.

With a new presidential administration slated to take office in 2025, fixed income investors may be feeling the angst of uncertainty when it comes to their bond portfolios. However, Vanguard sees the risk/return trade-off for bonds as favorable.

Escalating tensions from the Russia-Ukraine war are putting world stock markets on notice, while a risk-off sentiment is helping to feed into safe haven assets like bonds. Given this, it's an ideal time to consider international bond exposure.

Emerging market (EM) assets are benefiting from a post-election rally as investors are now more clear on what the incoming presidential administration will look like. In the meantime, if emerging market assets continue trending higher, consider bond exposure.

A bond market rally is underway on a global scale as investors from various countries are looking to complement their equities portfolio with bonds. From locking in yields to volatility safety, the reasons for the move vary.