Connecticut-based wealth manager Apella Capital reported selling 219,555 shares of the Vanguard Total International Bond ETF (BNDX) for an estimated $10.8 million in the third quarter.
What Happened
According to a U.S. Securities and Exchange Commission filing released on Friday, Apella Capital reduced its position in the Vanguard Total International Bond ETF (BNDX) by 219,555 shares during the third quarter. The estimated value of shares sold, calculated using the average closing price for the period, was approximately $10.8 million. After the transaction, Apella Capital reported holding nearly 1.2 million shares of BNDX.
What Else to Know
The filing reflects a net reduction of Apella’s BNDX position, which now represents 1.3% of Apella Capital’s $4.5 billion in reportable U.S. equity assets.
Top holdings after the filing:
- NYSEMKT:DFAC: $515 million (11.5% of AUM)
- NYSEMKT:DFSD: $194.1 million (4.3% of AUM)
- NYSEMKT:VTI: $151.5 million (3.4% of AUM)
- NYSEMKT:DFIC: $129.9 million (2.9% of AUM)
- NASDAQ:BND: $120.5 million (2.7% of AUM)
As of Monday, BNDX shares were priced at $49.83, roughly flat over the past year.
ETF Overview
| Metric | Value |
|---|---|
| AUM | N/A |
| Price (as of Monday) | $49.83 |
| 1-year price change | -0.3% |
ETF Snapshot
- BNDX’s investment strategy seeks to track the Bloomberg Global Aggregate ex-USD Float Adjusted RIC Capped Index (USD Hedged), focusing on global investment-grade, fixed-rate debt securities.
- The portfolio tracks a broad-based index of global, investment-grade, fixed-rate debt markets, with currency risk hedged to the U.S. dollar.
- The ETF serves institutional and retail investors seeking diversified international bond exposure with currency risk management.
Vanguard Total International Bond ETF (BNDX) provides broad exposure to non-U.S. investment-grade bonds, offering investors a way to diversify fixed income allocations beyond domestic markets.
Foolish Take
Apella Capital trimmed its exposure to foreign bonds last quarter, selling roughly $10.8 million worth of Vanguard Total International Bond ETF—a notable contrast to its concurrent purchase of the domestic-focused Vanguard Total Bond Market ETF (BND) (the firm’s fifth-largest holding). The move suggests a deliberate shift toward U.S. fixed income, possibly reflecting the firm’s preference for higher yields and greater policy visibility in the U.S. compared with international markets.
BNDX offers broad exposure to investment-grade, non-U.S. bonds—mainly sovereign and corporate debt issued in foreign currencies but hedged to the dollar. It carries a 2.95% SEC yield and a 0.07% expense ratio, appealing to investors seeking diversification with reduced currency risk. Yet, with global growth uneven and the U.S. bond market offering competitive yields, Apella’s reduced stake may signal a recalibration rather than a retreat from fixed income altogether.
For long-term investors, the adjustment underscores the balance between global diversification and domestic yield advantage. Amid years of market volatility, Apella’s reweighting toward U.S. bonds over international ones highlights a broader trend among advisors prioritizing stability, income, and liquidity in a high-rate environment.
Glossary
Assets Under Management (AUM): The total market value of investments managed on behalf of clients by a financial institution.
ETF (Exchange-Traded Fund): An investment fund traded on stock exchanges, holding assets like stocks or bonds.
Dividend yield: The annual dividend income expressed as a percentage of the investment’s current price.
Reportable assets: Assets that must be disclosed in regulatory filings, typically meeting certain thresholds or criteria.
Non-GAAP: Financial measures not calculated according to Generally Accepted Accounting Principles, often used to provide alternative views of performance.
Fixed-rate debt securities: Bonds or similar instruments that pay a set interest rate until maturity.
Currency risk hedged: An investment strategy that seeks to reduce the impact of currency exchange rate fluctuations on returns.
Investment-grade: Bonds or debt securities rated as relatively low risk by credit rating agencies.
Bloomberg Global Aggregate ex-USD Float Adjusted RIC Capped Index (USD Hedged): A benchmark tracking global, non-U.S. investment-grade bonds, adjusted for currency and issuer concentration.
Annualized: A figure (such as yield or return) converted to a yearly rate, regardless of the actual period measured.
Portfolio: The collection of financial assets held by an individual or institution.
Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard Total Bond Market ETF and Vanguard Total Stock Market ETF. The Motley Fool has a disclosure policy.
