Vanguard High-Yield Corporate Investor (VWEHX) seeks to provide a high level of current income. The fund invests primarily in a diversified group of high-yielding, higher-risk corporate bonds-commonly known as “junk bonds”-with medium- and lower-range credit-quality ratings. It invests at least 80% of its assets in corporate bonds that are rated below Baa by Moody’s Investors Service, Inc. (Moody’s); have an equivalent rating by any other independent bond-rating agency; or, if unrated, are determined to be of comparable quality by the fund’s advisor. The fund’s high-yield bonds and loans mostly have short- and intermediate-term maturities.

Fund Overview

  • Fund category: High-yield bond
  • Net Assets: $29.02 billion
  • YTD Return: 1.08%
  • Yield: 4.49%
  • Annual Report Expense Ratio(net): 0.23%

Vanguard High-Yield Corporate Investor (VWEHX) is one of the best bond funds for retirement investors who are seeking higher levels of income without completely going into the junk deep end.

More than 90% of VWEHX’s holdings are below investment-grade or not rated at all. That might sound hyper-risky, but understand that 55% of assets are BB-rated (the highest tier of junk), while another 29% are in B-rated bonds. Just less than 7% is below B, and a mere 1% isn’t rated at all. Indeed, you even get small parcels of investment-grade debt, including a 5% slug of AAA-rated bonds.

Overall Portfolio Composition (%)

  • Cash 5.17%
  • Stocks 0.42%
  • Bonds 91.86%
  • Others 0.00%
  • Preferred 0.43%
  • Convertable 2.11%

Sector Weightings (%)

  • Financial Services 50.55%
  • Energy 49.45%

CIT Bank Money Market Account

Bond Holdings

  • Maturity 4.3
  • Duration 3.71
  • Credit Quality N/A

Bond Ratings

  • US Government 0.00%
  • AAA 5.79%
  • AA 0.02%
  • A 0.00%
  • BBB 4.07%
  • BB 53.94%
  • B 28.49%
  • Below B 6.30%
  • Others 1.39%

Top 5 Holdings (4.21% of Total Assets)

  • Mobile US, Inc 1.10%
  • United States Treasury Notes 0.89%
  • Credit Suisse Group AG 0.74%
  • HCA Inc. 0.74%
  • Herc Holdings Inc 0.74%

Vanguard High-Yield Corporate Investor consists of a portfolio that can produce high yields but doesn’t utterly sacrifice quality. VWEHX delivers good long-term returns that are generally higher than the majority of its peers.

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