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Vanguard plans to add ultra-short bond ETFs to the lineup


Vanguard has submitted a preliminary registration statement to the US Securities and Exchange Commission for the proposed introduction of the Vanguard Ultra-Short Bond ETF in the second quarter of 2021. And limited price volatility.

The actively managed ETF will be separate but will have a similar strategy to the .0 16.0 billion Vanguard Ultra-Short-Term Bond Fund (Investor Shares: VUBFX; Admiral ™ Shares: VUSFX) and will be managed by the same portfolio management team. Its approximate expense ratio will be 0.10% of the average cost ratio of a 0.22% ultra-short-term bond ETF. *

Like existing ultra-short-term bond funds, ultra-short bond ETFs will invest in a high quality diversified portfolio and at least some medium-sized fixed-income securities, including investment-grade credit and government debt. ETF Mutual Fund, Bloomberg Barclays US Treasury Bellwethers: will use the same benchmark as the 1-year index. This will notice the same average duration – about 1 year. (Period is a measure of bond price sensitivity to interest rate movements.)

“The Vanguard Ultra-Short Bond ETF will feature an ETF structure for investors to find solutions to expected cash demand within 6 to 18 months,” said Caitlin Coglin, head of the Vanguard Portfolio Review Division. “An ultra-short strategy means closing the gap between a stable share price and short-term bond funds between money market funds that are suitable for 18-month to 3-year investment horizons.”

Management team

The Vanguard Ultra-Short Bond ETF will be managed by the Vanguard Fixed Income Group’s Active Taxable Fixed Income Team, which is one of the world’s most sustainable income managers with over ২ 2 trillion in global assets by December 31, 2020. Has operated an existing ultra-short-term bond fund strategy since 2015.

The new ETF will be co-managed by Samuel C. Martinez, CFA®, Arvind Narayanan, CFA, and Daniel Shykevich. Mr. Mart Martinez has been with Vanguard since 2007 and has been working on investment management since 2010. Mr. Narayanan has been working in investment management since 2002 and has been with Vanguard since February 2011. Has been with management since 2001 and with Vanguard since 2013.

The Fixed Income Group has 190 investment professionals, 100 of whom are dedicated to our actively managed taxable fixed income strategies. Using its deep investment capabilities, streamlined security selection process and rigorous risk management strategies, the team aims to provide Vanguard clients with consistent, long-term performance.

Vanguard has been offering ETFs since 2001 and is trying to meet the needs of various investors, including 19 U.S.-resident fixed-income ETFs representing সম্প 298.6 billion in client assets as of December 31, 2020. **


* Source: Average spending ratio for ultra-short-term bond investments is 0.45% for mutual funds and 0.22% for ETFs.

** Source: Vanguard.

Important information

A registration statement regarding the Vanguard Ultra-Short Bond ETF has been filed with the Securities and Exchange Commission (SEC) but has not yet taken effect. The SEC has not approved or endorsed these securities or passed on the adequacy of these prospectuses. Conversely no representation is considered a criminal offense. These securities cannot be sold or offered to be purchased before the registration statement takes effect. This communication will not constitute a sale offer or call for sale offer, nor will there be any sale of these securities in any state where such offer, application or sale will be illegal before registration or eligibility.

For more information about the Vanguard Fund or Vanguard ETF, visit investor.vanguard.com to get a prospectus or, if available, a summary prospectus. The prospectus contains investment objectives, risks, charges, expenses and other important information about a fund; Read and consider carefully before investing. Copies of the final prospectus will be available from Vanguard. Please note that an initial prospectus is subject to change.

You must buy and sell Vanguard ETF shares through Vanguard Brokerage Services (we offer them commission-free) or through other brokers (which may charge a commission). See Vanguard Brokerage Services Commission and Fee Schedule For full details. Vanguard ETF shares are not available directly without issuing funds A very large sum worth millions of dollars. ETFs are subject to market volatility. When buying or selling an ETF, you will pay or accept the current market price, which may be less than the net asset value.

All investments are at risk, including the potential loss of money you invest. Bond ETFs are subject to interest rates, inflation and credit risk. Diversity does not guarantee gain or protect from loss.

CFA3 A registered trademark owned by the CFA Institute.

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