- AMERICA

14/08/2009 Vanguard to introduce 7 new Bond Index Funds and ETFs

Vanguard has filed a registration statement with the Securities and Exchange Commission for seven new bond index funds and ETFs…

 

To complement its broad array of low-cost, actively managed fixed income funds, as well as its five existing bond index funds and ETFs, Vanguard has filed a registration statement with the Securities and Exchange Commission for seven new bond index funds and ETFs. The new offerings will bring the total number of Vanguard Bond Index Funds to 12. The funds will offer ETF Shares and Signal® Shares1 with expected expense ratios of 0.15%, and Institutional Shares1 with an expense ratio of 0.09%. The funds are expected to be available for purchase in late 2009.
The new funds are:
Fund :Vanguard Short-Term Government Bond Index Fund
Index : Barclays Capital U.S. 1-3 Government Bond Index

Fund :Vanguard Intermediate-Term Government Bond Index Fund
Index :Barclays Capital U.S. 3-10 Government Bond Index

Fund :Vanguard Long-Term Government Bond Index Fund
Index :Barclays Capital U.S. 10+ Government Bond Index

Fund :Vanguard Short-Term Corporate Bond Index Fund*
Index :Barclays Capital U.S. 1-5 Corporate Bond Index

Fund :Vanguard Intermediate-Term Corporate Bond Index Fund*
Index :Barclays Capital U.S. 5-10 Corporate Bond Index

Fund :Vanguard Long-Term Corporate Bond Index Fund*   
Index :Barclays Capital U.S.10+ Corporate Bond Index

Fund :Vanguard Mortgage-Backed Securities Index Fund
Index :Barclays Capital U.S. MBS Index

“Vanguard has a quarter-century of experience in bond index management, and expanding our range of funds is a logical extension of our capabilities,” said Bill McNabb, Vanguard president and CEO. “Financial advisors and institutions want to construct broadly diversified fixed income portfolios, while retaining the ability to emphasize particular sectors or durations. Working in concert, our broad-based bond index funds and these new, more targeted funds can help to achieve this goal.”

Vanguard is a pioneer in bond index management, introducing the industry’s first no-load bond index fund, Vanguard Total Bond Market Index Fund, in 1986. Vanguard followed with three additional bond index funds in 1994, and launched bond ETFs in 2007. Today, Vanguard Total Bond Market Index Fund has $59.5 billion in total assets, and the Total Bond Market ETF (ticker: BND) is among the industry’s top-15 best-selling ETFs.

The Vanguard Fixed Income Group is one of the largest bond managers in the world and is responsible for more than $460 billion in fixed income assets across 42 taxable and tax-exempt funds. Its team of more than 100 tenured investment and research professionals steered the funds clear of subprime-related credits that had been the focus of last year’s credit crisis, and over 3-, 5-, and 10-year periods, all of Vanguard’s active and indexed fixed income funds have outperformed the average return of their respective peer groups (source: Lipper Inc. as of June 30, 2009) 2.

As the financial markets begin to emerge from the instability of the past 18 months, stock and bond indexing has gained market share as investors recognize the potential benefits of the approach’s low costs and broad diversification.
Following two consecutive years of industry-leading cash flow,Vanguard has garnered more than $70 billion of net new cash flow to long-term funds through July 2009 (Source: Strategic Insight Simfund MF and Vanguard). The majority of that cash is flowing into indexed products, whether traditional bond or equity index funds, Vanguard’s 39 existing ETFs, or index-based products like Vanguard Target Retirement Funds. In addition, Vanguard continues to gain momentum in the ETF market, with nearly $67 billion in assets and $13 billion in net cash flow year-to-date through July 2009.

Source: ETFWorld.com – Vanguard


 

 


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