Vanguard Introduces Actively Managed Fixed Income Fund

Vanguard filed a registration statement with the U.S. Securities and Exchange Commission (SEC) for Vanguard Core Bond Fund, a new actively managed fixed-income offering.

Expected to be available in the first quarter of 2016, the fund will be managed by Vanguard Fixed Income Group and will seek to outperform the broad investment-grade U.S. fixed-income market. The fund will invest in a broadly diversified portfolio of high-quality bonds, including Treasury, mortgage-backed, and corporate securities of varying yields and maturities.

“Vanguard Core Bond Fund will share many characteristics with Vanguard Total Bond Market Index Fund, including low-cost exposure to high-quality bonds, broad diversification, and an intermediate-term average maturity. Unlike its index sibling, however, the new fund will be actively managed, employing a disciplined, risk-controlled approach that will seek to outperform through security selection, sector allocation, and, to a lesser extent, duration decisions,” says Vanguard CEO Bill McNabb.

Vanguard Core Bond Fund will offer Investor Shares with an estimated expense ratio of 0.25% and Admiral Shares with an estimated expense ratio of 0.15%, both of which are well below the intermediate-term bond fund category average expense ratio of 0.84%, according to the firm.