Spread Compression Makes These Bond ETFs Appealing

Group 1: Credit Market Overview - Tightening credit spreads present opportunities for fixed income investors, with investment-grade credit tightening by 10 basis points and high-yield by 30 basis points during Q3 [1] - Emerging markets (EM) debt has gained attention, with credit spreads narrowing by 78 basis points year-over-year and 40 basis points in Q3 [2] - A positive outlook for credit is expected to persist into 2026, supported by stable corporate leverage, strong margins, and lower U.S. consumer debt levels compared to pre-pandemic [3] Group 2: Investment Options - The Vanguard Total Corporate Bond ETF Shares (VTC) offers exposure to investment-grade corporate bonds, with a 30-day SEC yield of 4.75% and a low expense ratio of 0.03% [4] - The Vanguard Emerging Markets Government Bond Index Fund ETF Shares (VWOB) provides diversified exposure to EM debt, featuring a 0.15% expense ratio [5]