VALLEY FORGE, PA — Vanguard recently launched the Vanguard Core-Plus Bond ETF (VPLS) and announced plans to introduce the Vanguard Core Bond ETF (VCRB) by the end of the year. These two new actively managed bond Exchange-Traded Funds (ETFs) offer clients broad, diversified fixed-income exposure with low equity correlation and the potential to outperform broad bond benchmarks over the long term.
The newly launched Vanguard Core-Plus Bond ETF primarily provides exposure to U.S. investment-grade securities, but it also has the flexibility to add allocations in sectors beyond the U.S. investment-grade bond market. These additional sectors include U.S. high-yield corporates and emerging markets debt. The Core-Plus Bond ETF comes with an expense ratio of 0.20%, significantly lower than the average of 0.75% for similar funds. The ETF will be managed by Daniel Shaykevich, Brian Quigley, Arvind Narayanan, and Michael Chang.
Meanwhile, Vanguard’s upcoming Core Bond ETF will offer comparable exposure to the Core-Plus Bond ETF, but with more modest allocations to riskier sectors like U.S. high-yield corporates and emerging markets debt. It is expected to have an expense ratio of just 0.10%, compared with an average of 0.58% for competing funds. The Core Bond ETF will be managed by Daniel Shaykevich, Brian Quigley, and Arvind Narayanan.
Sara Devereux, the global head of Vanguard Fixed Income Group, expressed her optimism about the new products. “Vanguard Core Bond ETF and Vanguard Core-Plus Bond ETF offer clients diversified single-fund fixed income portfolios offering exposure to a range of sectors, qualities, and maturities,” she said. “Offering these strategies through the convenience and flexibility of the ETF structure meets clients’ growing preference for ETFs and further expands access to our experienced and talented active fixed-income team.”
While Vanguard has offered investors core bond and core-plus bond mutual fund strategies since 2016 and 2021, respectively, these new ETFs are distinct from the existing mutual fund products. The launch of these new actively managed bond ETFs is a testament to Vanguard’s commitment to providing its clients with diversified investment options that cater to their evolving needs and preferences.
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