Vanguard Total Corporate Bond ETF

VTC

Market cap $1.52B

2025 has been a year marked by uncertainty and 2026 could feature more of the same. Nonetheless, it's never too early for fixed income investors to position their portfolios to capture opportunities in the new year.

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More rate cuts are forecasted for 2026, which could bring further tightening in credit spreads for fixed income investors pondering whether they should opt for corporate bond options for added yield in lieu of or alongside Treasuries exposure.

Tightening credit spreads can create opportunities for fixed income investors to maximize in the current bond environment. In its latest iteration of Active Fixed Income Perspectives, Vanguard noted this spread compression across the full credit market spectrum during Q3.

Corporate bonds typically appeal to those seeking higher yield potential relative to safer government debt, but current market uncertainty may keep fixed income investors from making the move. However, strong fundamentals are also underpinning corporate bonds, which only add to their appeal despite ongoing risks.

Warwick Investment Management, Inc. added 85,836 shares of the Vanguard Total Corporate Bond ETF in an estimated $6.65 million transaction based on the quarterly average price for Q3 2025. This transaction represents 1.15% of 13F reportable assets under management as of Q3 2025.

On October 8, 2025, Wedmont Private Capital increased its stake in Vanguard Total Corporate Bond ETF (VTC 0.25%) by purchasing 80,721 shares. The estimated trade value was $6.25 million, according to the SEC disclosure.

Muni and corporate bonds trading activity has been reaching record levels through the first half of 2025 at the Intercontinental Exchange (ICE). This certainly speaks to the attractiveness of both, which offer yield and strong fundamentals in the current market landscape.

The iShares Core U.S. Aggregate Bond ETF (AGG -0.30%) is a suitable option for investors seeking bond exposure in their portfolios. That said, the Vanguard Total Corporate Bond ETF (VTC -0.13%) is a better option for long-term investors on a risk/reward basis.

VTC offers broad, investment-grade corporate bond exposure with a low expense ratio, but is overweight BBB credits and has a 6.7-year duration. Current credit spreads and rates are not attractive for entry; spreads are near historic lows and rates may move structurally higher due to inflation and deficits. We expect VTC to become attractive only after a significant widening in credit spreads, ideally above 150-200 bps, or during a recession scenario.