Stockchase Opinions

Larry Berman CFA, CMT, CTA Vanguard Short Term Bond ETF BSV-N COMMENT Mar 24, 2025

BNDX and BSV correlated inversely with the Fed Fund rate?

Actually, incorrect. If the US economy is doing very well, the Fed will raise, not cut, interest rates. You can't rely on Fed policy to know what the broader bond market will do. BSV is short-term bonds and much more correlated than BNDX which is about the broader bond market.

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COMMENT
Short Term Bond ETF. Very short-term and very cheap and is the safest way of playing the US bond market.
BUY
This product is fine. With Vanguard, you know you're getting quality and lower cost. Have to be aware that bonds have done poorly this year, and the longer the bonds, the more they've been beaten up. Positive toward short-term bonds. He'd look to pick some up after the first week of June, when he understands rates are going up by 0.5%.