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Vanguard Introduces Seven New Bond Index Funds
November 23, 2009 (PLANSPONSOR.com) - Vanguard has introduced seven bond index funds with ETF shares featuring expense ratios of 0.15%.
The funds, which expand Vanguard’s bond index family to 12, also offer Signal shares with estimated expense ratios of 0.15% and Institutional shares with expense ratios of 0.09%, according to a press release.
The funds and the benchmarks they seek to track are as follows:
Fund (ETF Ticker) | Barclays Capital Index |
Vanguard Short-Term Government Bond Index Fund (VGSH) | U.S. 1–3 Year Government Float Adjusted Index |
Vanguard Intermediate-Term Government Bond Index Fund (VGIT) | U.S. 3–10 Year Government Float Adjusted Index |
Vanguard Long-Term Government Bond Index Fund (VGLT) | U.S. Long Government Float Adjusted Index |
Vanguard Short-Term Corporate Bond Index Fund (VCSH) | U.S. 1–5 Year Corporate Index |
Vanguard Intermediate-Term Corporate Bond Index Fund (VCIT) | U.S. 5–10 Year Corporate Index |
Vanguard Long-Term Corporate Bond Index Fund (VCLT) | U.S.Long Corporate Index |
Vanguard Mortgage-Backed Securities Index Fund (VMBS) | U.S. MBS Float Adjusted Index |
“Vanguard’s expanded fixed income lineup provides greater choice and more
price competition in the market, and offers financial advisers and institutions
more flexibility to tailor the credit quality and duration of their bond
exposure,” said Gus Sauter, Vanguard’s chief investment officer, in the
press release.
Vanguard noted that unlike a conventional bond index fund, a bond ETF can trade
at a substantial premium or discount to its net asset value based on overall
supply and demand of bonds in the market. The firm published an article in the
autumn 2009 edition of its shareholder newsletter – “The choice between
ETFs and conventional fund shares” – that examines the similarities and
differences between the two products. Investors may request a free copy
of the newsletter by calling 877-662-7447, or read it at www.vanguard.com/share-choices .
The new bond index funds will be managed by the Vanguard
Fixed Income Group, which oversees nearly $485 billion in assets, including
$114 billion in bond index fund assets and $10.4 billion in bond ETF assets.
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