Vanguard Total Corporate Bond ETF

Vanguard Total Corporate Bond ETF (VTC) is an index fund that tracks the Bloomberg U.S. Corporate Bond Index, holding a sample of 5,333 investment-grade (higher-rated) company bonds as of August 31, 2026. It pays income monthly and charges 0.03% a year, well below the 0.14% average of similar funds. The trade-off: an average maturity of 10.7 years makes its price sensitive to interest rates, and it lost 15.72% in 2022.

• Over the year to Oct 27, 2026, VTC returned -1.7%, 7th of 8 among similar funds.
• Its 5-year annualized return was -0.2%.
• In the 2020 COVID crash it fell 19.7% and regained its old high 3.4 months after the low.
• Its worst full calendar year was 2022 (-15.7%); its best was 2019 (+14.6%).
• The deepest fall in its price history was 22.1% (Sep 22, 2021 to Oct 20, 2022), recovered by Feb 13, 2026.

As of Aug 31, 2026, the fund held 5,333 securities; the ten largest made up 1.13% of assets.

The bonds mature in 10.7 years on average (weighted by size), with an average coupon of 4.69%.

• Over the three months to Aug 31, 2026, investors withdrew a net $7.5M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +0.17%, -1.66%, +0.43%.

VTC is an index fund run by Vanguard. It aims to track the Bloomberg U.S. Corporate Bond Index, which covers investment-grade, fixed-rate, taxable corporate bonds. Investment-grade means credit rating agencies judge the issuer fairly likely to repay. The bonds are in US dollars and are publicly issued by US and non-US industrial, utility and financial companies. The index is market-weighted, so companies with more bonds outstanding get bigger weights. The fund normally invests at least 80% of its net assets in bonds from the index.

The fund doesn't buy every bond in the index. It uses sampling: it holds a set of bonds that, taken together, matches the index on key risks such as credit quality and interest-rate sensitivity. It also keeps its average maturity in line with the index's, which was 10.3 years as of August 31, 2025. As of August 31, 2026, the fund held 5,333 securities with an average maturity of 10.7 years and an average coupon of 4.69%. Its ten largest positions made up just 1.13% of assets. The prospectus filed December 19, 2025 reported portfolio turnover of 133%.

The fund also held seven small US Treasury futures positions, worth a net -0.03% of assets. Futures like these can fine-tune how sensitive a fund is to interest rates. VTC is not leveraged. Its shares trade on Nasdaq at market prices, which can sometimes differ from the value of the bonds it holds.

• VTC charges 0.03% a year, versus an average of 0.14% for the similar funds below (1st of 8, cheapest first).
• Of that, 0.01% is the management fee; the rest covers other fund expenses.
• Using the prospectus's standard example, $10,000 invested would cost about $3 in the first year and $39 over 10 years (assuming a 5% annual return).

VTC pays monthly income from a broad, low-cost mix of investment-grade company bonds, but its roughly 10-year average maturity makes it too rate-sensitive to count as a defensive holding.

VTC can add monthly income to a portfolio. Its trailing 12-month yield was 5.14% as of October 27, 2026, and its expense ratio is 0.03%. It is not a cash substitute. The fund launched in 2017, so it has no record from the 2008 crisis. In the 2020 COVID crash it fell 19.7% between March 6 and March 19, 2020, then got back to its old high by June 30. Rising rates in 2022 hurt more. It lost 15.72% that calendar year, its worst. Its deepest drop, 22.1% from September 2021 to October 2022, took until February 13, 2026 to recover, about 40 months. Anyone who had to sell shares for spending during that stretch would have locked in losses. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by bond funds with the closest average maturity and issuer mix (N-PORT).