VALLEY FORGE, Pennsylvania., July 29, 2021 / PRNewswire / – Vanguard today filed initial registration statements with the United States Securities and Exchange Commission to introduce two new active bond funds: Vanguard Core-Plus Bond Fund and Vanguard Multi-Sector Income Bond Fund. The funds are designed to meet the needs of clients seeking actively managed âcoreâ and âsatelliteâ bond portfolios and will complement the range of higher alpha diversified fixed income strategies managed by Vanguard Fixed Income Group.
âVanguard has invested heavily in talent and active management capabilities for decades, which has spawned a line of active bond funds that leverage the proven expertise of portfolio managers and help clients succeed with their investments. “, said Kaitlyn caughlin, head of Vanguard’s portfolio review department. âVanguard’s customer-centric approach to product development has produced a carefully curated line that generates long-term value and meets the evolving needs of investors.
The new funds represent Vanguard’s continued efforts to improve investor outcomes through single fund fixed income strategies with sustainable investment merit and low costs. Core-Plus Bond will consist of a broadly diversified portfolio invested primarily in Treasury securities, mortgage backed securities and other investment grade US securities. In addition, the fund may invest beyond the US investment grade bond market in areas such as high yield corporate securities and emerging market debt of all credit quality ratings. Core-Plus Bond will differentiate from the Vanguard Core Bond Fund by its additional flexibility in sectors with higher alpha potential, in particular by its greater exposure to emerging and high yield markets. The fund will have an estimated expense ratio of 0.30% for investor stocks and 0.20% for Admiral stocks, compared to an average expense ratio of 0.48% for industry peers.1.
Multi-sector income bonds will provide exposure primarily to investment grade US securities, high yield US corporate securities and emerging market debt of all credit quality ratings. Multi-sector income bonds will have an estimated expense ratio of 0.40% for investor stocks and 0.30% for Admiral stocks, compared to an average expense ratio of 0.98% for peers in the sector.1.
Vanguard plans to make the Core-Plus Bonds available to investors in the fourth quarter of 2021 and the Multi-Sector Income Bonds available for public investment at a later date.
A global leader in fixed income securities
The fund will be managed by Vanguard’s Fixed Income Group, a global team of over 190 permanent and dedicated professionals who oversee 2,100 billion dollars. For nearly 40 years, Vanguard Fixed Income Group has distinguished itself in the industry with its deep investment capabilities, disciplined stock selection process, rigorous risk management techniques and strong long-term performance.
The company has placed particular emphasis on investing in its active bond portfolio management capabilities and product offering, including the Vanguard Global Credit Fund, the Vanguard Emerging Markets Bond Fund and the Vanguard Core Bond Fund. As a result, Vanguard’s track record as a bond manager remains unmatched: 76% of Vanguard’s fixed income funds and 96% of Vanguard’s active fixed income funds have outperformed their peer group averages over the past five years. last years. June 30, 20212.
Reopening of the Vanguard Wellington Fund
Vanguard also announced today that due to the improved liquidity and capacity of the fund, the company will immediately reopen the Vanguard Wellington Fund to all investors. The fund is managed by Wellington Management Company LLP and has been closed to new financial advisers, institutional investors and intermediaries since 2013.
Vanguard devotes considerable resources to monitoring its range of funds, ensuring that clients have access to strong and sustainable investment products that meet their long-term needs. As part of this process, Vanguard will occasionally close certain funds to protect existing shareholders from high levels of cash flow.
Vanguard is one of the world’s largest investment management firms. From June 30, 2021, Vanguard managed 8 trillion dollars in global assets. The company, headquartered in Valley Forge, Pennsylvania, offers 418 funds to its more than 30 million investors worldwide. For more information, visit vanguard.com.
Asset figures at June 30, 2021 unless otherwise stated.
1 Source: Morningstar, Avant-garde.
2 For the five-year period ending June 30, 2021, 83 of 109 bond funds and 49 of 51 active bond funds outperformed their peers’ averages. Results will vary for other periods. Only funds with a history of at least five years were included in the comparisons. (Source: Lipper, a Thomson Reuters company). Note that the competitive performance data presented represents past performance, which is not a guarantee of future results, and that all investments are subject to risk. For the most recent performance visit our website at www.vanguard.com/performance.
The registration statements relating to the Vanguard Core-Plus Bond Fund and the Vanguard Multi-Sector Income Bond Fund have been filed with the Securities and Exchange Commission (SEC) but have not yet become effective. The SEC has not approved or disapproved these securities or approved the adequacy of the preliminary prospectus of any of the funds. Any statement to the contrary is considered a criminal offense. These securities cannot be sold and offers to buy cannot be accepted until the entry into force of the registration statements. This communication does not constitute an offer to sell or the solicitation of an offer to buy, and there will be no sale of such securities in any State in which such an offer, solicitation or sale would be illegal prior to registration. or qualification under the securities laws of such state.
For more information on Vanguard funds, visit vanguard.com for a prospectus or, if available, a summary prospectus. The investment objectives, risks, charges, expenses and other important information about a fund are contained in the prospectus; read it and review it carefully before investing.
Any investment is subject to risk, including the possible loss of the money you invest. Diversification does not guarantee a profit or protect against a loss.
Bond funds are exposed to the risk that an issuer will not make payments on time and that bond prices fall due to rising interest rates or negative perceptions of an issuer’s ability to make payments. payments. Investments in bonds are subject to interest rate, credit and inflation risks. High yield bonds generally have medium and low credit quality ratings and are therefore subject to a higher level of credit risk than bonds with higher credit quality ratings.
Investments in securities issued by non-US companies and governments are subject to risks, including country / regional risk and currency risk. These risks are particularly high in emerging markets.
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