Dow’s Corporate Bond ETF Bet Grows to $24 Million as Long-Term Yields Stay High

On November 13, Dow Chemical (NYSE:DOW) disclosed in its 13F filing that during the third quarter of 2025, it bought 51,571 shares of the Vanguard Long-Term Corporate Bond ETF (NASDAQ:VCLT).

What Happened

According to a filing with the Securities and Exchange Commission dated November 13, Dow Chemical bought 51,571 additional shares of the Vanguard Long-Term Corporate Bond ETF over the third quarter. The shares were worth about $4 million as of September 30. These were shares held with sole discretion; the firm separately reported holding onto 264,221 shares of the same ETF held with shared discretion.

What Else to Know

Top holdings after the filing:

• NYSEMKT: SPY: $226.94 million (85.5% of AUM)
• NASDAQ: VCLT: $24.52 million (9.4% of AUM)
• NYSE: AI: $3.85 million (1.5% of AUM)
• NASDAQ: IEF: $3.55 million (1.3% of AUM)
• NYSEMKT: SPLB: $1.64 million (0.6% of AUM)

As of Monday, shares were priced at $76.01, up about 2% over the past year.

ETF Overview

Metric	Value
Net assets	$8.98 billion
Yield	5.4%
Price (as of Monday)	$76.01
1-year total return	7%

ETF Snapshot

• VCLT tracks the Bloomberg U.S. 10+ Year Corporate Bond Index, providing exposure to long-term, investment-grade corporate bonds.
• It primarily invests in U.S. dollar-denominated, fixed-rate, taxable securities issued by industrial, utility, and financial companies with maturities greater than 10 years.
• It's a passively managed ETF with a low-cost indexing approach.

The Vanguard Long-Term Corporate Bond ETF offers institutional investors targeted access to the long-duration segment of the U.S. investment-grade corporate bond market. The fund’s scale, with a market capitalization of $8.30 billion, positions it as a significant vehicle for those seeking yield and duration exposure. Its strategy emphasizes diversification and cost efficiency by tracking a broad, rules-based index of high-quality issuers.

Foolish Take

Dow’s reported assets remain overwhelmingly tilted toward equities, with its S&P 500 exposure alone accounting for more than 85% of reported AUM. Against that backdrop, incremental additions to long-duration corporate bonds look less like a macro bet and more like balance-sheet housekeeping.

The bond ETF now represents just under 10% of Dow’s disclosed portfolio, a meaningful allocation but hardly aggressive. What stands out is the quality of exposure. The fund tracks investment-grade issuers with maturities beyond 10 years, pairing duration sensitivity with credit profiles designed to hold up across cycles. With a 30-day SEC yield north of 5.6% and an expense ratio of just 0.03%, the risk-reward equation looks unusually clean for patient capital.

Dow’s split between sole and shared discretion also matters. Maintaining a much larger shared-discretion position suggests continuity rather than conviction drift. In other words, this looks like yield capture and cash optimization, not a dramatic repositioning.

Glossary

13F filing: A quarterly report filed by institutional investment managers disclosing their equity holdings to the Securities and Exchange Commission (SEC).

Assets under management (AUM): The total market value of investments managed by a fund or 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.

Annualized: A figure converted to a yearly rate, based on data from a shorter period.

Indexing approach: An investment strategy aiming to replicate the performance of a specific market index.

Investment-grade: Bonds rated as relatively low risk of default by credit rating agencies.

Duration exposure: The sensitivity of a bond or portfolio’s price to changes in interest rates, based on maturity length.

Fixed-rate security: A bond or debt instrument that pays a set interest rate until maturity.

Passively managed: A fund management style aiming to match, not outperform, a specific index.

Rules-based index: An index constructed using predefined, transparent criteria for selecting and weighting securities.

Expense ratio: The annual fee expressed as a percentage of assets, covering a fund’s operating costs.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool recommends C3.ai. The Motley Fool has a disclosure policy.