This is an actively managed bond ETF that holds ultra-short investment-grade bonds with an average maturity of 0 to 2 years. It makes modest adjustments to duration to reflect the short-term rate environment and selects sectors and securities with attractive relative value.

It suits conservative investors who want to minimize principal volatility while earning more interest income than cash equivalents, as well as investors considering where to put short-term funds.

It is an ETF run by Vanguard using an active management approach.

Vanguard's bond management team selects and holds sectors and securities with attractive relative value among ultra-short investment-grade bonds. It makes modest duration adjustments to reflect the short-term rate outlook and the shape of the yield curve, and it diversifies broadly, centered on investment-grade corporate bonds and asset-backed securities.

• Expense ratio below the category average
• Limited price volatility thanks to an ultra-short duration of 0 to 2 years

Assets under management (AUM) stand at $9.9B, and the total expense ratio is 0.10% per year.

Its lower expense ratio relative to similar ultra-short bond ETFs is a cost advantage over a long holding period.

Because of the nature of ultra-short bonds, price swings are small and the ETF tends to move steadily, while its returns depend heavily on the level of short-term interest rates. Distribution levels also tend to move along with changes in the rate environment.

Fund flows are fairly steady because the ETF serves as a parking place for short-term cash, and during periods of rising market volatility, inflows sometimes increase as safety-seeking money looks for shelter. The appeal of the short-term bond category as a whole shifts with the direction of interest rates.

Its strengths are a low expense ratio and limited price volatility, while its drawbacks are changes in yield from interest rate movements and the possibility of principal loss.

The JPST, PULS, FTSM, and DUSB shown in the table are comparison candidates in the same ultra-short bond category, with differences in issuer, expense ratio, and duration policy. MINT, managed by PIMCO, is also an actively managed ultra-short bond ETF, with a somewhat higher expense ratio. Investors who want one more step of stability can also consider products such as SGOV and BIL, which focus on short-term US Treasuries, and those who want to extend duration slightly can consider BSV, a short-term bond ETF, as an alternative.

Here are the points to review before investing in VUSB. It is used as an alternative to cash equivalents, but it is not a principal-guaranteed product and is affected by the interest rate environment, so prior review is necessary.

Rising interest rates and a deteriorating credit environment are the main drivers of short-term price movements. The short duration limits the size of fluctuations, but investors should keep in mind that, unlike a deposit, principal is not guaranteed.

It is a suitable choice for conservative investors who want more interest income than cash equivalents while keeping volatility low. For greater stability, short-term Treasury ETFs such as SGOV and BIL are alternatives, and for a longer duration, a short-term bond ETF such as BSV can also be considered.