How to buy bond index funds only when they are mostly composed by higher interest rate (%) bonds

Question

Vanguard states that their index funds are re-balanced every 4 months or when the management (exceptionally) considers it necessary.

I imagine the FED raising rates several times during 2022 and 2023 will make the Vanguard U.S. bonds index funds to get re-balanced, but is there any way to know when will this has already happened, in order to buy fund shares only when it is mostly composed by bonds with the higher rates?

In other words, imagine I want to buy a bonds fund's shares only when it is mostly composed by funds with (at least) 2% of interest rate. Is this possible?

Edit

By 'higher rates' I mean interest rates, not the bond rating (AA+, AAA etc.)

Answer 1

For a retail investor looking at simplified funds, I think the core assumption should always be that any publicly traded funds are efficiently priced. This concern you have, about the composition of the bond fund relative to current market interest rates, kind of implies that you would need to determine the proper price for these funds. This is something that you can be reasonably confident is already 'priced-in' to the cost of buying into the fund itself, especially for something as streamlined as a lower risk bond fund.

So whether the bonds are comprised of 1% bonds, or 3% bonds, if the current market interest rate for the same risk-level of new bonds is 2%, you can rest assured that there will be a discount or price premium on purchase, that converts the 'effective yield' to 2%.

If you wanted to check that this is the case, you could compare the price of the fund before and after a Fed rate change. You won't see a full 0.25% price adjustment when the Fed changes rates by 0.25%, because the market already expected a change to be very likely, but you will see a slight drop in any fixed income fund after market interest rates go up, to reflect the fact that any product priced by the market yesterday needs to be re-priced today assuming higher yields are possible with comparative products.