Vanguard Core Bond ETF

VCRB

Market cap $3.83B

The U.S. Federal Reserve instituted its first interest rate cut of the year, which could force investors to reassess their fixed income portfolios to plan for further monetary policy changes. Given this, it's an opportune time to consider using more flexible active funds in order to mute any rate cut noise.

It might be auspicious timing that the VettaFi Q3 Fixed Income Symposium came less than 24 hours after the Federal Reserve instituted the first rate cut of the year. With that, investors must know how to navigate the current fixed income environment in which a Fed is easing monetary policy.

The allocation into fixed income isn't just happening on a retail level. Increasingly, more allocation is happening with asset managers, including heightened interest in active management.

Approximately 500 new ETFs launched year-to-date through mid July, according to FactSet. This is significantly more than the approximately 300 at this point a year earlier.

One of the prevailing trends in the ETF industry has been the proliferation of active funds. Based on results from Trackinsight's Global ETF Survey 2025.

With tariff news providing constant equity market fluctuations, the case for bonds becomes more compelling. The added uncertainty also punctuates the need for an active management strategy, which one particular Vanguard ETF offers.

The Vanguard Core Bond ETF offers an actively managed alternative to BND, aiming to outperform through security selection, sector allocation, and duration positioning within the investment-grade bond space. Since its late 2023 launch, VCRB has consistently outperformed BND, delivering a 140 basis point return advantage without significant volatility spikes. With a 6-year duration, a 4.8% yield to maturity, and low annualized volatility (5.2%), the Fund presents a compelling balance of income and rate sensitivity.

Uncertainty continues to define the investing landscape. Finding the best ETFs highlights the challenge of making money amid so many unknowns.

Early signs of diminishing economic activity and inflation could be a harbinger for bond prices to rise. If so, consider taking advantage of a potential bond rally with a pair of ETFs from Vanguard.

The CboeVolatility Index (VIX) spiked higher through the first week of April, prompting investors to seek refuge in safe haven assets like bonds. While passive bond ETFs offer broad-based exposure, investors shouldn't overlook active options that exist.