VALLEY FORGE, PA — Vanguard recently announced plans to introduce Vanguard Core Bond ETF (VCRB) and Vanguard Core-Plus Bond ETF (VPLS), two active fixed-income ETFs that will be managed by Vanguard Fixed Income Group. Vanguard intends to launch the ETFs at the end of the year.
“For more than forty years, Vanguard has delivered strong investment outcomes for our active fixed-income investors across an expanding range of strategies,” said Dan Reyes, head of Vanguard Portfolio Review Department. “These new ETFs will offer investors access to Vanguard’s world-class active investment talent at a low cost and with the convenience and flexibility offered by the ETF structure.”
Vanguard Core Bond ETF and Core-Plus Bond ETF are designed to provide clients with single-fund fixed income holdings that are broadly diversified across a range of sectors, credit qualities, and maturities. The active mandates of these ETFs enable the portfolio managers to seek the best opportunities while remaining risk aware. Vanguard Core Bond ETF will offer exposure primarily to U.S. investment-grade securities with modest allocations to riskier sectors, such as U.S. high-yield corporates and emerging markets. Vanguard Core-Plus Bond ETF will be similarly constructed but will have flexibility to add greater allocations in both U.S. high-yield corporates and emerging markets. Vanguard Core Bond ETF will have an estimated expense ratio of 0.10% while Vanguard Core-Plus Bond ETF will have an estimated expense ratio of 0.20%.
Core Bond ETF and Core-Plus Bond ETF will share the benchmarks, management teams, and expense ratios of the admiral share classes of their respective mutual fund counterparts. However, they will be separate and distinct products. Natural differences in total asset size, client cash flow activity, and other factors will result in differences in fund holdings and, in turn, modest differences in fund performance, between the corresponding ETFs and mutual funds, particularly over shorter time periods.
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