Outperforming traditional active equity managers and equity factors have frequent periods of underperformance, some of which are long in duration and large in magnitude. Investors who understand this are more able to maintain the patience they need to reach their goals.
A confluence of factors over the decade since the global financial crisis has steadily nudged the corporate bond market down the investment-grade quality scale. The COVID-19 pandemic threatens to knock some issuers off the scale completely.
Differences between the market values and net asset values of bond ETFs are common but may widen during periods of market volatility. Vanguard suggests that ETF investors use limit orders and avoid trading at the market open or near the market close.
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